John Christian Bernhardt; Bernhardt Furniture Company
AMERICAN FURNITURE HALL OF FAME
ORAL HISTORY INTERVIEW
JULY 15, 1992 AND SEPTEMBER 3, 1993
LENOIR, NORTH CAROLINA
OFFICE OF JOHN CHRISTIAN BERNHARDT
Dr. Phillip L. Cantelon, Interviewer
Roy L. Briggs, Interviewer
INTERVIEWER: Mr. Bernhardt, this afternoon I’d like to get some biographical information about you, about the period of your life prior to coming to work at Bernhardt Furniture.
BERNHARDT: I was born and raised about a block from the middle of Lenoir in my grandfather’s home. My two great-grandfathers were early settlers in this area. We had no Caldwell County when my first ancestor came here. There was Burke County on one side and Wilkes County on the other side. He had a farm on the edge of the county. He could get into town, do his business, and get back to feed the hogs and milk the cows in the afternoon. But Burke County and Wilkes County were much larger than that. My great-grandfather settled about where Lenoir is – on the county line – a little bit east of it. He and everybody else wanted some place closer to go. There was no town here – just a crossroads trading post, which he operated.
He got elected to the legislature and got an act passed creating Caldwell County. We had a county but we didn’t even have a courthouse. His farm covered a good part of what’s now the downtown part of Lenoir. His nephew from Newton, Pennsylvania, came down and laid out about eight square blocks in the middle of town. You can tell where they are by the narrow streets there now. Most of them haven’t ever been widened.
They had an auction and sold the lots. He bought two or three for himself. They raised enough money in the auction for the city lots. There wasn’t a municipality; it was just a subdivision out in no-man’s land. They raised enough money selling the lots to build a courthouse. Then they built a courthouse and they had a county. Many, many years after that, the community became a municipality.
The man I described to you is my great-grandfather. Another great-grandfather was brought here by that first one I mentioned because there was no minister of any denomination in the county full-time. They had circuit riders come through, preach and move on. The fellow I’ve been telling you so much about is named Harper. My other grandfather induced a Presbyterian minister, who was preaching in a community in the middle of the state, to move here. He lent the minister the use of a house that was on the edge of his farm. He became the first full-time minister. After a few years, they were able to build a church, and he built a house for himself, where my kinfolks lived until recently. That’s how we got a church, a preacher, a county, a city and me.
I was born in this old home place I described to you. My mother and father stayed on with her father due to his wife having died early. My mother stayed on to look after the old widowed gentleman. From the time they were married, my mother and father lived there until they died. My brothers and sisters and I were all born there and lived there until we were grown, married and scattered.
INTERVIEWER: You went to high school in Lenoir?
BERNHARDT: Yeah. It was the first school we had here – the Lenoir Grade School. It was before they had the school systems that they have now; it went from the first grade up through the 11th. They didn’t have 12 grades in those days. The school stood a block from the center of town, where the First Baptist Church is now.
They built what was the first really bona fide school and they were supposed to be able to move in September of 1923. Like all contracts, it was after the Christmas holidays that they were able to move in. They let the boys in the senior class, just about a half dozen of us, off (of school) to take up the school desks, which were screwed to the floor. (They were those old things that you lift up the lid and they had the ink well.) They let us skip all the classes to unscrew those things, one room at a time, put them on a truck and haul them over to the new building, put them down, and screw them down again. We drove through the square. We didn’t have drivers’ licenses, but one boy was big enough to reach the pedal and he drove the truck that somebody had loaned them. We circled around the Confederate monument that stood in the middle of the square. We came down North Main Street, went around and round the circle, waving at everybody. Then we went down to the new school and worked like hell. I thought we were great. We didn’t have to go to school. All we had to do was work three times as hard as most people worked, like adults who worked for a living. We enjoyed it.
I guess it was about 50 years later that the last graduating class from what was then the new school building asked me to make the commencement address. They wanted me to speak to the last class that was to graduate there before they abandoned the building. I happened to have been the first class to come and the last one to say goodbye to it.
INTERVIEWER: Did you go to Davidson for the 12th grade, then?
BERNHARDT: We didn’t have 12th grade.
INTERVIEWER: You became a freshman in college?
BERNHARDT: Yes. In those days, you didn’t have to be too desirable to get into Davidson or any college for that matter. They didn’t have any admissions boards or SAT tests or all that stuff. If you could guarantee that you were going to pay the tuition – pay your own way – you could get into Harvard or any of the rest of them. They don’t like to admit that at Harvard, but it’s true. There were no difficulties back in those days.
INTERVIEWER: Had you always planned to go to Davidson because of your legacy?
BERNHARDT: I never had given it any thought. Years later, we were closing up my old family home and going through my father’s roll-top desk. I found a letter from the president of Davidson; I think it was Dr. Henry Lewis Smith. Anyway, the letter was addressed to my father, thanking him for having sent a check for $3,500 to establish a scholarship. The letter wound up by saying, “Incidentally, of course, this will take care of any of your sons who plan to come to Davidson.” Eventually, there were boys in my family and we all went. That subject was never raised by Davidson. I guess my father had forgotten all about it years before that so we never did use the scholarship.
They’ve got a great thick book with all the scholarships and it’s in there somewhere.
Incidentally, for my 70th birthday or something, my family did set up a scholarship in my name down there.
INTERVIEWER: What did you major in at Davidson?
BERNHARDT: I majored in English literature. Well, actually, theoretically, I guess I majored in economics. They didn’t have what you’d call business administration for a curriculum. My main interest, what I enjoyed most was 18th-century English literature – prose and poetry.
I just always assumed I’d come back here and go to work for my daddy; everybody went to work for their daddy in those days – on the farm or whatever. Then they called up and said that the factory had burned down. I never had given any thought to what I was going to do, even when I was going to work for my daddy in the furniture business. (He was also in lumber.)
I never had thought about anything in the future, like most young people. For a while, they weren’t sure whether they were going to rebuild or not. They thought that they might concentrate solely on lumber rather than furniture. At that particular point in time, I decided, “If they won’t have any there, if I’m not going to work for my daddy in his enterprises of some kind, I believe I’d like to be a school teacher and teach English.”
It never materialized. They built the factory and sent me out in the Smoky Mountains. I got my diploma from Davidson on a Sunday and on Tuesday night, my older brother who was the active manager of my father’s affairs put me in a Model-T Ford and we drove all day to Bryson City, Tennessee. We stopped there and went on a logging train down to a place called Fontana, which is now Fontana Dam. It’s a huge hydroelectric dam. They built it right exactly on top of where my logging camp used to be. My brother stayed about three days with me and showed me where the timber lines were. He showed me this little simple set of double-entry books he kept in pencil mostly. He ran out of ink in that country.
Let me back up a bit. When the old factory burned in 1926, it was in the same location of our oldest plant. My father and my older brother were undecided about whether they’d go back into the furniture business or not. My father had a sizable tract of timber out in Swain County on the Little Tennessee River, where this dam is now. He owned the timber rights, which was frequent in those days and still is today in some cases. He didn’t own the land; they had the rights to cut the timber within a certain number of years. The time was not critically short but it was getting close to the time that it needed to be undertaken.
When the factory burned, they thought it was an ideal time for us to set up to cut this tract of timber. My older brother had gotten that started in just a few months. That’s when I graduated. He took me out there and threw me in the lake, in the Little Tennessee River. It was sink or swim. He left in about three days and I didn’t see anybody for about six months after that, not even a razor or a bath.
I spent about three years out there, gradually spending more time here and less out there. We finally wound it up and liquidated the sawmill. (We had a little interest in it.)
Most of the operation was done by barges on the Alcoa Company Lake. That’s not the one they built later, but it’s still there. It’s part of the TVA system.
INTERVIEWER: What were on the barges?
BERNHARDT: We used barges for most of the timber. All of it was on mountainsides that sloped down in the Little Tennessee River. The sawmills were portable types that you took to the timber instead of bringing the timber to a central location. We’d get the mill and the steam boilers. It was a real feat to see them move those things up the mountainside. They’d cut the timber, saw it into lumber and then bring it down the hill and load it onto the barges.
They had one barge that had an old steam skitter. The modern version of it drags the logs into place. Imagine loading those on a barge, putting paddle wheels on the back of the barge and the old steam engine, the skitter engine, moved the paddle wheels. It didn’t travel great distances and there was no current. It worked out pretty well except that the aluminum company decided they wanted to lower the water level about 5 feet overnight or something. It wasn’t so good when that happened.
INTERVIEWER: Where did the barges take the lumber?
BERNHARDT: They fed into the lake from these different locations where the sawmills were put from time to time. They’d lift it off of the barge, put it on this little railroad that we’d bought from another lumber company that was closing their operation. Our railroad took it about 5 miles up the river to where there was enough flat land to have a lumber yard. That part of the Smoky Mountains doesn’t have many slopes.
We’d haul it up with our little privately owned railroad to a place that was big enough and flat enough to unload it and stack it in the “air dried” space for air drying. By that time, I’d accumulated enough lumber and enough experience to start peddling it. I’d take it to Waynesville, North Carolina, down below to Burlington, North Carolina. We’d load it when they’d saw it. They’d load it in cars and drag it up our little road to where it connected with the Murphy branch of the Southern Railway. It was shipped from there.
They had a couple of products that no longer exist – at least not for the purposes that they were used for then. There used to be a tannery about every 20 miles through this part of North Carolina. It was the United States Leather Company, I believe they called it, which basically became Interco and Florsheim Shoes and all that stuff. They used the bark off of white oak trees and chestnut oak trees. They were the only varieties that had the right type of tannic acid in them. We peeled the bark off those trees before selling them into lumber and letting them dry. We would load it in boxcars and sell it to a casket company located between Waynesville, North Carolina, and Asheville. There was one in Asheville, one in Old Fort, one in Morganton, a little one here in Lenoir (but it wasn’t a customer because it wasn’t suitable), one in Wilkesboro and on down the river. I didn’t go beyond Wilkesboro, but I did go as far as Winston-Salem down the Yadkin River.
The other thing was that about every 20 miles there were the tannery companies. About every 30 or 40 miles was a casket factory.
They used chestnut lumber for the caskets because, next to cypress, it’s about impervious to dry-rot and moisture. All the better grades of chestnut lumber I’d peddle out along the road to casket companies. Most of the casket companies were close to the mountains.
The furniture companies began to develop on down, starting in various places like this. Our company’s one of the oldest locations or facilities in the South. The furniture companies came for economic reasons just about every 20 miles. The reasons were partly for transportation and access to local lumber and various combinations of these. That road eventually became what we called the “Figure Eight Furniture Highway”.
After we managed to lead the Market away from Chicago, it moved to High Point. High Point was just a minor local market, primarily for January and July shows, just mom-and-pop dealers. But two or three states suggested North Carolina.
INTERVIEWER: The early Market in High Point was just a regional market?
BERNHARDT: When the business was first built it was entirely, solely a regional market. Let’s start at the beginning. The earliest Market as such was in High Point. Grand Rapids, Michigan was larger because of the concentration of furniture manufacturers, and compared to the quality of furniture made in the other parts of the country, the Grand Rapids pieces were better quality and better styled. It started because of the proximity of timber in the northern Michigan peninsula. New England never did develop a market that amounted to anything despite the presence of these old well-known companies like Hitchcock Chair, Nichols and Stone, Heywood Wakefield and Cushman. Nearly all the solid furniture and practically all Colonial designs came from that area, but no national or regional market ever developed in the New England area. Later on they had one in New York City but it was unrelated to the location of the factory.
My father used to show at the Grand Rapids Market. We were very small and very inexperienced compared to the more sophisticated people in Michigan. He didn’t have a showroom. Showroom space there was very limited, even when the demand was very limited back in those early days. Most of what showrooms they had belonged to the factory where they had a showroom at the location of the factory, like we did later on here.
The old established aristocracy, you might say, being local, naturally were the first ones to get all the spaces that were available. In fact, a lot of it was cooperative; they built the spaces and the buildings. So people like my father and his counterparts were just sort of gypsies; they could go up there and the people would rent you hall space. Father made chairs – dining room chairs – in those days. He’d line his chairs up in the hallway and sit there with a paper and pencil and hope to write orders for people that came up and down the hall.
Later on, he got to where he could have a small space that he leased twice a year. The Markets were always in January and July, and as children, my father would come tell us all goodbye between Christmas and New Year’s Day and we didn’t see him again until about Groundhog Day at the first of February. He was on a train and the Market had no specific duration, as far as I know. It required about a month for the dealers to drift in. It was only the larger ones. Many people didn’t go that far. Then just before the Fourth of July, he’d tell us goodbye and leave. While we were at home celebrating the Fourth of July, he was on a train trying to get to Grand Rapids, Michigan. It took about two or three days.
As the industry throughout the country grew, became more sophisticated and had greater volume and progress in every direction, the Grand Rapids thing was just intolerable. I keep using my father as an illustration. I’m not saying he’s the only one who did these things; he was just the only one I happen to know about. As far as I know, I didn’t know the others – friends and contemporaries of my father. I’ve heard him talk about these things.
They began to rent loft buildings around the 12th Street Station in Chicago. There were some old warehouse-type buildings not too far from the railroad stations in Chicago. They would rent out a certain amount of space for three weeks or a month at a time in Chicago and take the merchandise there. My father would be in Grand Rapids, like he had been in the past, for part of the time, and then he’d hustle over to Chicago and show there for part of the time.
It didn’t take many years for all the adverse aspects of Grand Rapids to be outweighed by all the advantages of being in Chicago. There was more space, more transportation. You could get there from anywhere in the country; it was the hub.
Sometime prior to 1925, there was a fellow named Billy Wilson, who I think had originally been a furniture representative. He must have been one of the world’s best salesmen. I never met him, but I heard about him and I’ve seen his pictures up in the old Furniture Market Building. He was able to get some investors interested enough to take the gamble to build that old American Furniture Mart at 666 Lake Shore Drive looking right out on the Navy Pier. At the time it was built, it was the largest building in the world. Later, Marshall Field built the Merchandise Mart and it became the largest. Then the government built the Pentagon; there’ll never be anything to beat what the government’s going to do.
The thing was finished and ready for occupancy in 1925. Here again, I’m using my father as an illustration. People who had been doing the kind of thing I’ve just described would move. A good many of them had gotten out of Grand Rapids entirely by that time. Most of them came from Chicago in those loft buildings – temporary things – and moved into the American Furniture Mart. Our company was one of the first ones that moved in for the first Market they ever had. We were on the 10th floor and we stayed there for 20 years or longer. We needed more space and couldn’t get it so we moved to the 15th floor and we stayed there until we organized the rebellion and moved out of Chicago. No, that’s wrong. We moved over to the Merchandise Mart for about five years.
INTERVIEWER: You were first there in 1925? What happened after the fire in ’26? Did you go in ’27?
BERNHARDT: The fire was in October or November of ’26. I got out of Davidson in the spring of ’27. It was the fall of ’27 when they started reconstruction on the replacement.
INTERVIEWER: What did the company make in 1927? Just chairs?
BERNHARDT: No, they originally made solid oak bedroom furniture. It was in what they called a “Golden Oak” finish. It was all quarter-sawn white oak. At that time, you could go through and take your pick. There was an unlimited supply of timber right at your back door; you could pick your species or whatever you wanted to do. The reason they used the quartered white oak was that it had a flake. You must have seen it.
Maybe you didn’t know what you were looking at, but it had a little flashy sort of a grain effect in addition to the natural grain of the oak that you’re accustomed to. When it’s quartered, you’ve got that little decorative flash. It’s sort of like using crotch mahogany instead of plain mahogany. They made that between 1915 and 1920, I guess. They phased out of that into making chairs.
In those days, the main distribution system was from the factory to a wholesaler to the retail dealer to the consumer. One factory would make chairs and the other factory would make tables. Over in Mount Airy (North Carolina), they used to have the Mount Airy Mantel and Table Company. They made mantel pieces and tables. These wholesalers’ main offices were in larger cities, and particularly out in the Middle West they had the representatives traveling, calling on the retail stores. In the bigger cities like New York, the wholesalers would, as far as possible, bring dealers from say, Connecticut, northern New Jersey and whatnot. Then they could show them a sample or two or at least they’d have all their pictures there. They’d take him out, wine and dine him, like everybody else. I spent most of my life doing that.
I’ll put it this way: at the time we were making chairs, toward the end of that time, Thomasville Chair Company, Statesville Chair Company and Bernhardt Chair Company were the three dominant or better-known, large producers of dining room chairs. Drexel, as an illustration, made tables and also case pieces or case goods, but they bought the chairs from one of those three sources. We made it quite close, could load it on a truck here and take it over there. Even from Statesville, the roads weren’t paved. There was a lot of difference between going from Lenoir to Morganton and going from Statesville to Morganton. They didn’t use horses, but they used one-ton Ford trucks on a dirt road that they would mire up in when it rained.
The wholesaler, the middleman, gradually faded out of the picture, except in a few instances for certain reasons. A few of them still exist, act as a middleman and sell to a dealer, but it’s like the last dinosaur.
The obvious evolution was that, taking Drexel and Bernhardt as an illustration, Drexel decided: “We don’t want to be bothered buying our chairs. We can’t get delivery. Bernhardt makes lousy chairs anyway. We can make them better. We can get them on time with a captive source. Or we can go to Joe Zilch Wholesale Company in Boston or whatever, and we can offer him a complete thing, a complete package.”
One other thing I didn’t mention was that the wholesaler would make a deal with different people for the component parts of a suite of furniture. He’d take a little finish paddle, send it to each of those people and they were supposed to match that. Well, you can imagine how close the match was; it didn’t match. That was another reason for getting the complete components of the suite.
INTERVIEWER: Tell me why the wholesalers faded out.
BERNHARDT: I guess they just didn’t know. It was a question entirely of economics. Just like the Democratic Convention is going to be a thing of the past in another four or six or eight years or something. Everybody’s in communication – television. Everybody’s going to be doing what Ross Perot is doing. It’s a whole lot more logical than getting up there in New York, sweating and spending $4 million on building a podium and what have you. Maybe that’s not a good illustration, but it’s still the same factor. It was unnecessary as the factories became better managed, more experienced, larger and better financed.
That’s one thing that the wholesalers had done: a lot of the small factories were very thinly capitalized. Most of them were just family businesses. The wholesaler, presumably, did not always qualify but he had enough capital to assemble it, warehouse it, store it, and make quick delivery to the retail dealer.
As the producer grew in every sense – expertise, knowledge of marketing and all that – to some extent, the retailers began to have these so-called “syndicates”. They were never very successful, but a group of individually owned furniture stores would join a syndicate, sort of a co-op, and the syndicate would send a representative around to scout out things ahead of time. It all tended to make the middleman less essential.
Transportation became better; railroads improved. Instead of having one train a day from High Point to Washington or whatever, they had many. Of course, we’re back to where we don’t have any now. It goes in circles. Now it’s all on trucks. We’ve got a huge trucking division that, most of the time, makes more money in the trucking business than we do in furniture.
There were a whole lot of different reasons why the wholesaler became an unnecessary appendage, like the appendix. You don’t need it anymore.
INTERVIEWER: When you came to work at Bernhardt, you said you went to work in the lumber area first. How long did you spend at the lumber end of the business?
BERNHARDT: We stayed in the lumber business until after my father’s death in 1935. I finished Davidson in 1927, so that would be eight years – not too long before World War II.
INTERVIEWER: Was there ever a problem with the people you sold lumber to? Did you sell the best lumber back to the furniture business?
BERNHARDT: Well, that’s true today. Anybody that’s operating a hardwood lumber mill and distribution outlet ships certain lower grades. In my early days, the lower grades all went to a box factory. The wooden box factory was an industry. Nobody had ever invented the carton. The next level went to non-furniture, and the better quality went into either furniture or something where the wood itself was exposed and where the grain, the knots, the defects and so on were objectionable.
After my father got in the furniture business, he operated a wooden box factory. He was still more involved in lumber than furniture. They called the wooden boxes “box shooks”. Somebody making corn flakes in Michigan wanted to ship the corn flakes so they’d send my father an order for so many boxes, giving the three dimensions. The top and bottom would be the same. If you wanted 500 boxes, he got a thousand “box shooks” – boards that had one cross piece here, one cross piece there, the same thing at the end and the same thing at the side. He would take these lower grades of lumber and run them through this box factory. He had a remarkable old machine that sort of looks a little like these Japanese robots that you see so much of today, sort of the same principle. You could set it certain ways and the nails – they were just about 6-penny common nails, I guess – were fixed so that if you were going to make 500 of a certain size, the nails were properly positioned and the apparatus was properly positioned so it came down, drove the nails and went back up. It was really a remarkable thing. I don’t suppose there’s one in existence today – in a museum, maybe.
In the furniture industry or the lumber industry, we never had the equivalent of the Henry Ford museum.
INTERVIEWER: Yes, I was curious if he sold most of his wood to the furniture company. If Bernhardt Lumber Company sold to Bernhardt Furniture first and then what was left over, he could sell to other people.
BERNHARDT: The large majority of his lumber business throughout the years, and up until we finally discontinued it, was never important to our furniture business. Even when I was out there three years after finishing college, I had very little product out there that was suitable for what we were using over here. At no time was it ever of any significance. Certain things, like wormy chestnut, used to be used for what we now use particleboard for – core stock. We cut all of our own chestnut and everybody used a standard sort of thing. Everybody had it; everybody used it. That was a constant type of thing. It never changed with the change in the merchandise or the nature of the product. To that extent, the fact that we had a sawmill and we had furniture was convenient, but it wasn’t a necessity.
The operation we were running was smaller and less sophisticated than most of the lumber operations that my father had been in. I was certainly less sophisticated than anybody who ever ran it. Most of the timber we had in that particular part of the Smoky Mountains, a large majority of it, was species that were popular in the furniture industry at that particular time. We had no sales organization and it was up to me to not only cut down the trees and get them into lumber – get them dried and ready to go in a box – but also to sell it. For that reason, that particular lumber, along with the tanned bark and the casket lumber, was sold up and down the Furniture Highway.
I guess what I’m trying to say is: that would not follow a pattern that would be typical of the two industries due to the individual circumstances. It was just a snapshot and not a movie.
INTERVIEWER: How would you describe the company in 1927, ’28?
BERNHARDT: We were trying to get focused on the type of product we were making. I would say it was typical of the usual furniture company that existed at that time in the southern part of the United States as far as size. (Although, individual companies were never exactly the same, of course.) It was considerably larger than the smallest; it was in the medium- to top-level in size, sophistication of product, manufacturing equipment and expertise.
INTERVIEWER: How big? What were the sales per year, for example, before the Depression?
BERNHARDT: I couldn’t even make a good guess at it now –’27 to ’92, that’s 65 years ago.
INTERVIEWER: Would your father have spoken to you about that?
BERNHARDT: Oh, yeah. There were no secrets at home. I’d hear my older brother and my father talk business and that sort of thing. He didn’t withhold anything from me. I guess I was too busy out there trying to cope with what I had and he was getting along in years by that time. Up until then, he was just as active as he’d been as a young man.
INTERVIEWER: When did you go into the furniture part of the business?
BERNHARDT: I worked in the summertime. I carried a water pail on the lumberyard. My father had a sizable lumberyard right here in practically the middle of Lenoir. That was where one of his box factories was located. We lived just a few blocks from that. I’d walk from home in the summer. I wasn’t in school. I was, literally, a child; there’s not much to do around here, and you did that because it’s something to do.
Later on, when I was 15 or something like that, I worked from then on in the factory each summer as long as I was in high school and college. The first job I ever did in the factory was to ride with the men that hauled the blocks for sale. We had a team of two huge Clydesdale horses and there was this fine colored gentleman who drove them. Nobody could shoe those horses unless he was with them. They’d take them to the blacksmith and the blacksmith wouldn’t touch them until this fellow got them in the stall and did whatever he did. Then he’d shoe the horses. I guess if he’d died, the horses would have been useless. They were wild.
Anyway, I rode with him hauling blocks. People used the blocks in the furniture factories to cook with and to heat the house in the summertime. That was about the same time I’d been carrying water in a pail around the lumberyard. My first job working in the production line was rubbing the dining room chairs.
For some reason (this always seemed strange to me), that was the only thing that was on piecework then or since in the case goods business. It just won’t work. Also, I was dumb enough to try to make it work the other way in upholstery, that won’t work. Of course, I was smart enough to listen to fellows that could convince me it wasn’t going to work. But upholstery is susceptible to piece-rate type of pay and case goods is not. Anybody that tries to has a theory that it ought to work the other way better, (which I did) but not for long; it just won’t work.
I was rubbing chairs. I got 1 cent a chair for straight chairs and 2 cents a chair for arm chairs. As far as I know, the old adults that had been on the job probably got twice that. They got 2 cents and 4 cents, I reckon.
INTERVIEWER: This was during the Depression?
BERNHARDT: No, that was way before the Depression. That was about 1920. I was still in high school.
INTERVIEWER: When you came back after college, when did you go to work in furniture?
BERNHARDT: For the first year, I was out in the lumber business 100 percent of the time.
For the second year, I was out there 50 percent of the time, and 50 percent of the time I was over here. The third year, I was still doing both.
That particular part of my family’s experience in the lumber business was a liquidating kind of thing, you might say. The idea was to liquidate the timber contract, but the sawmill and such. Ever try to sell a railroad locomotive?
I sold a locomotive to this fellow and I thought I’d really hit the jackpot. I couldn’t find anybody that’d buy it for any purpose. His place was in Asheville. It’s on the wilderness side of the Fontana Lake. There’s a logging railroad there. I thought all I had to do now was to get that thing loaded on a flatbed box car, freight car, and haul it from Bryson City to Asheville. I came to find out the Interstate Commerce Commission had so many screwy rules that you couldn’t put a locomotive on top of a freight car that was going to run on the railroad system. They weren’t going to make an exception for me – 25 years old and in the back woods of the Smoky Mountains; they weren’t about to change everything in Washington. So I gave that up real quick.
I thought: “The thing runs. It’s a standard gauge width. It’ll cost me a good deal of money to do it, to hire the crew from the railroad to come down here and drive it up.” We just had a couple of cars that were worth saving for junk. I was going to have a locomotive and tow cars from Bryson City to Asheville; I was going to drive it up in front of the junk dealer’s place. I was going to have a lot of fun – get rid of the thing and get a little something out of it. I found out that the railroad union had all these things I would have had to have done to comply with all the railroad’s regulations and all the union’s regulations. As far as I know, that thing’s sitting under water, 200-feet deep in Lake Fontana, which is part of the TVA system there.
INTERVIEWER: What was your position in the company when you came back from Lenoir full-time?
BERNHARDT: I did anything that I was told to do. It was strictly a family-owned business, which it still is today, of course. It operated pretty informally. My father was not as active as he had been. My brother Don had an office staff of maybe a dozen to 15 people. That was a big deal.
I remember what it was like when I used to go as a little boy with my father. He’d leave home in his car. There weren’t more than half a dozen cars and automobiles in Caldwell County. He had a Maxwell car with brass all over. Every Saturday the children had to shine that brass so it’d look good for church the next day. He’d crank up the car, go by and pick up a lady who lived nearby, who was sort of his secretary (and the oldest and most experienced lady he had.) Then he went by the post office and got the mail. Then he went by two other homes and picked up two other ladies, one a young girl just out of high school, and we went to the office. They all got out, he opened the mail and everybody did what they had to do. That was it.
INTERVIEWER: What was the effect of the Depression on your company?
BERNHARDT: We got along fine, believe it or not. This industry, particularly in the South, I guess, got along reasonably well during the Depression. We had a hell of a time after the end of World War I, around 1923.
They didn’t call it a recession; they had some other name then. The furniture factories went broke like crazy.
During the Depression, we ran full-time. In those days, 40 hours were at straight time and five hours were at time-and-a-half overtime. As best as I can remember, we never were closed for one single hour during the Depression.
Looking back on it, I didn’t know it at the time, but we never had a sales manager. Our company wasn’t big enough to need one, and that was mostly for the aristocrats up in Grand Rapids making that fancy furniture. We’d go out and sell our own stuff. Cut the trees and go sell the furniture. It was tough selling during the Depression, obviously.
My brother decided that it’d be a smart thing for him to hire a top-visibility person out of a department store, a merchandise manager of the furniture department. We did a large percentage of our business in those days with department stores. We thought his knowledge of the retail functions of the department store would combine well with his knowledge of the trade. (He was well known; most everybody knew everybody else in those days. It wasn’t as sophisticated or as stratified as it is now.) So my brother got this fellow to come here and be the sales manager. If I remember right, his salary was $10,000 a year or maybe it was $20,000; whatever it was, it sounded like the national debt. Nobody had ever dreamed of paying anybody that much money.
So the fellow moved here. He fixed himself up a little apartment over a store building in the middle of town and proceeded to merchandise. My brother still did design and product development. He got out on the road and peddled furniture.
He had two aspects that turned out to be invaluable. One was he had an overpowering, consuming desire to make money. If he’d had $100 million, he’d have been unhappy until he got to be like our dear friend Sam Walton. It was just an obsession with him. Although he was getting this fantastic salary, he wanted more than that. So to try to satisfy that part of the man’s personality, my brother worked out some way where he got an override or a bonus. He didn’t get a percentage of sales, but he did get something beyond his fixed income.
The other thing was that like every good salesman I ever knew, he wanted to under-price everything he had. He and my brother used to have knock-down, drag-out fights about what they were going to price a certain suite for. Usually the sales manager came out a little bit ahead of my brother. They compromised, but it was two-thirds to one-third of him being on the long-end of it on the price. Everything we brought out during the Depression was just under-priced. And it sold.
The cost of living came down just almost as fast as the incomes decreased. Anybody that had a job got along pretty well. He didn’t do quite as well as he did before the Depression, but his groceries didn’t cost him much. In our particular case, he had work; he didn’t lose his job. It was really fairly painless, not just to us in our company, but to the community and communities of this type.
The bread lines, the things you see in those documentaries on those poor folks, were horrible. You can’t seem to describe it. They had no jobs and they couldn’t get a job and had no way to raise a garden. That’s another thing that helped in this kind of a community. Practically everybody had 2 or 3 acres of land around the house, and in the summertime, they raised a garden and the wife would can the stuff. They kept a cow and maybe a couple of pigs that they slaughtered in the fall, and they were pretty self-sustaining, even if they didn’t have a job at all.
INTERVIEWER: Did the company cut salaries or wages?
BERNHARDT: My brother was responsible, but he had to go off somewhere and I was the one that had to make a talk. We blew the whistle up here at the factory, got everybody together in the old finishing department, which is the one that had the most room to communicate. I climbed up on a 50-gallon drum of varnish. I told the people that things were tough and we didn’t know how much worse they were going to get. All we knew was we were all going to try to do the best we could to get along in this world until it got better. I was speaking for my brother; I was too young to carry any weight; they wouldn’t pay any attention to what I said. I said, “My brother, who can’t be here today, wants me to tell you that we will never reduce anybody’s income – fixed income, wages – until such time as we think the company is endangered, that its existence, its future, is in jeopardy.
It was sort of an intangible sort of way of measuring it, but that’s what I said. At that time, there were about 12 different family-owned furniture companies in Lenoir. Every one of those companies had reduced wages one time, and several of them had reduced them twice, before we ever made any reduction. At the time we made it, we had gotten down to where we were just fighting tooth-and-nail to see whether we could break even. In our psychology, that was the existence; once we lost money, we considered our company to be in jeopardy. We never had lost any money – maybe never made much, but we never lost it.
INTERVIEWER: You finally were forced to cut back.
BERNHARDT: The Depression was in the ’30s. It was in ’33 when it hit the bottom in my recollection. There was the bank holiday. Roosevelt closed the banks, closed my grandfather’s bank, which made him madder than hell. That bank was more solid than the federal government ever dreamed to be. It was in the fall of 1932 when they made the first reduction. We thought it was inevitable that we’d have to make another one. We didn’t know, but we were pessimistic, I guess. By the time Roosevelt closed the banks and opened them again, they had that sudden inflation. It was against the law to sell less than a certain price. It did its job. He did a fantastic service to this nation, like George Washington and Abraham Lincoln and all those folks, except that he carried on too long.
INTERVIEWER: Did you participate in an NRA Blue Eagle operation in the furniture industry?
BERNHARDT: Oh, sure. I had to. Someday if I ever get around to cleaning it up, I’ve got a filing cabinet that’s got stuff that goes back to the CCC, the Blue Eagle and the Works Progress Administration. We’re right in there with them.
They had a floor under which you couldn’t sell your product. If you sold your product for less than that you could be audited. Of course, they never got around to auditing anybody, but that’s one thing you can put in your book. We’ve always kept careful records of everything – every kind of a government, division of the government or governmental agency. We haven’t always done everything they said to do, but we’ve tried, within reason, to keep all the records and do all the things they said to do. I have at least one friend in the furniture business who was very successful. He’s no longer living. His philosophy was exactly the opposite. He didn’t pay any attention to anything the government said to do; he didn’t keep any records. But he did spend a lot of time in Washington in cocktail bars and what have you. He came out smelling like a rose. He didn’t have any records. We spent more money keeping the records than we did making furniture, and nobody ever looked at his records and nobody ever looked at ours.
I guess it’s because my family is German on my father’s side. I remember many times hearing my father say that Germans have an abiding and great respect for constitutional authority. And they do. If somebody tells a German what to do, he does it.
INTERVIEWER: How big was Bernhardt Industries just before World War II? Had you grown during the Depression?
BERNHARDT: Yeah. Pearl Harbor was December of…?
BERNHARDT: 1941. At my age, I get World War II and World War I sort of confused. You do it with generations. I can’t remember whether this is so-and-so’s grandson or his great-grandson.
I can’t give you any figures exactly without research. Talking about records, we’ve got them back to March 31st or something of 1889. That was the organizational meeting of the stockholders and directors, and they elected my father as president.
INTERVIEWER: You still had one plant?
BERNHARDT: No, I believe it was about 1935, and by that time, my brother had died and I was in the business pretty much all by myself. We were in an in-between stage where we didn’t need a whole lot of organization, a whole lot of structure, and yet we needed a little more than we had. I studied the thing and I talked to friends, not in the furniture business necessarily, but people whose judgment I respected. I decided that with this family business we had to choose: expand, diversify, and grow to the size that we could have a controlled sales organization. That was one of the big headaches when your salesmen all were multi-line salesmen and had four or six different, non-competitive lines of furniture. When one of them was hot and the other happened to be cold that year, that one just really froze to death, because a man’s going to pull out his best thing first.
For that and a whole lot of other reasons, I decided we had to grow and had to diversify our product or else we should sell the corporation or run it down. You can run one down, like running out a car or a truck. It gets far enough gone, and you can work it hard enough so it junks. A lot of them did that.
I came to the conclusion that I shouldn’t just quit and sell out when we had other things we could do. At that time, we were dining room only. We had some other investments and it hadn’t been too long since we were pretty active in the lumber business. I could have gone back into that. But the reason was more personal than economic or business; it was a personal decision because I was the only member of the family that was involved in the business at all. The rest were all widows and wives and children. I decided we’d see what we could do about expanding and growing. So in 1938, I built the first upholstery plant. It’s now called Plant Number 6. At almost the same time, maybe three months or so later, I built the first case goods plant, which was planned to produce bedroom furniture.
Just before we made this thing, we were probably the best resource for medium-quality and -priced dining room furniture in the world. Anybody that came to Chicago or wherever we might be showing – they might not have bought from us, but they came to see us, because we were enough of a factory that they couldn’t ignore it. They wanted to know what the competitor across the street was going to have and that sort of thing. For our particular bracket of the dining room furniture segment, we were as well established as you could possibly be.
I decided that in making the decision to expand, the obvious thing to do was to get into upholstery and bedroom furniture. Bedroom furniture, being obviously woodwork, was closely akin to the dining room furniture that we’d been doing for years. Upholstered furniture was totally different. I think when our sales organization and our dealers heard that we were going to go into the upholstered furniture business, they got about two-thirds ready to throw out the dining room lines they’d bought. They thought that was the greatest thing on earth; they thought the management up here had gone crazy. Well, anyway, we did it.
The only thing I feel any real pride about was that I’d recognized that the upholstery business was totally different from case goods, and it is today, and it’s going to always be – every aspect of it. It’s a style thing. Ladies select it like they select clothes. In the manufacturing end of it, a fellow and his brother-in-law can take a screwdriver, a tack hammer and a garage and make one piece of upholstered furniture just as well as Don Smith down here, who’s in charge of all of Masco’s upholstered division.
The supply of case goods and wooden furniture in general – it could include occasional tables as well as dining room and bedroom – tends to be relatively fixed. When things get better, people don’t run out and build a new dining room, bedroom, or occasional table factory. When things get bad, they’ve got it and they can’t do anything with it except to run it. They have to do whatever they have to do to get enough volume to keep it going. So, in case goods, the supply is fixed, but the demand fluctuates with the economy of the nation.
In upholstery, it’s exactly reversed. When the times are tough, manufacturers with an established furniture upholstery operation have got certain key people, not only supervisors but the so-called “lead” men that are experts in their particular phase of the production process. They work for Hickory Chair Company or you name it. As soon as things begin to get really good, they can’t quite meet the demand. This fellow in the meantime has gotten a little acquainted with some of the buyers because they come down to the Hickory Chair Company showrooms to look at fabrics. He knows them by name and knows the town where they came from. He gets his brother, his cousin and a couple of other fellows that work at Hickory Chair Company and they go over and get a little garage building or something and start making upholstered furniture.
There is any number of upholstery manufacturers in the Hickory and High Point areas that if they get an order or if they’d like to have it and they think they can sell a truckload of it, they will buy the frame from a frame man. They’ll buy the spring stuff from Hickory Springs Company. They’ll buy the fabrics from a fabric jobber that has the stock right there in Hickory. He pulls the bolts out and cuts them up. It’s just like delivering milk every morning. They don’t usually buy it by the day but they could; they do it by the week. They’ll figure out a week’s worth of work for what little crew they have and order the stuff from a supplier. By Monday morning or Saturday night, it’s there. They go to work, make the stuff up and by next Saturday, it’s put on a truck and shipped to New York or wherever. That’s a little extreme, but it happens all the time.
If you’re selling upholstered furniture, the supply is just unlimited. If times stay good long enough, the country will be producing upholstered furniture at a rate that the whole world couldn’t absorb. Then when the slump comes, they go back to work for Hickory Chair Company.
All that started from saying that I at least had sense enough to know that I didn’t know anything about the upholstery business. I knew it was totally different.
We were well-known; our name was well-known; I reckon we were reasonably respected for integrity and financial stability and whatnot. We had the entree into the market. The same people that bought our case goods and dining room furniture for years also bought upholstered furniture. What we had to do was to convince them that we weren’t totally crazy to offer them upholstered furniture.
I designed the building. I knew how to build factory buildings. I selected all the machinery. You don’t need a whole lot of machinery to start a simple operation.
I spent most of my time trying to find the best man who could be found, could be made available. I’d rather have had Elliott Wood that started Heritage. He was one of the greatest upholstered manufacturers that’s ever been. I’d rather have had him, but he’s got a few million dollars and he’s the founder of Heritage, which became Drexel Heritage. He came up through occasional tables and upholstery.
I’d rather have gone to him or gone to the chairman of the board of Masco, but I thought the most essential thing was to find one key person who had integrity, who had ambition, who had the expertise and the knowledge, and who, to the extent that he was known, had an excellent reputation as a businessman and as a producer. I searched and interviewed all over the country. I finally came up with a fellow that I thought was just the very man that I needed, and he wouldn’t even talk to me.
Wesley Collins – at one time, he was president of this company. For a short time, he was president of Broyhill. He’s now president of Universal. He was a young assistant superintendent of Heritage Upholstery Factory, the one that still exists. That’s just upholstery only. He said he’d gone through Guilford College, had been a Marine fighter pilot in the World War in the Far East, and I believe they called him back into Korea as a night fighter in the Marines. Anybody that could go through that is bound to have something. I’d never met the man, but after all the things I’d described as the typical man that I was looking for, all of them eventually would come back to Wesley Collins.
I finally got him to agree to come up here one Saturday. I’d seen him briefly at High Point not too long before that, but I’d never even met him. I got him to agree to come up here, talk and look at what we had and what plans I had. He didn’t much want to do it. He loved golf and he had a young baby. He was a young married fellow, just getting started. He had other things he wanted to do and he was happy where he was. But he agreed to come. I kept on calling him and writing him. Finally, I got him to agree to come a second time. We really got more down to business then. He still said it was a good company; he liked the people; he was doing well.
In production, the only man between him and the top was an old landmark, a recognized expert, but he was getting some age on him and Wesley looked forward to stepping in and taking that over. Finally I got him to bring his wife and let her look around the community. I took her up and let her meet my wife and did all the kinds of things you would. He agreed to come.
We started with the building that I had designed and built, with the machinery that I had selected, which was the same thing he would have selected if he’d been here. He got a lady who was a good sewer. He got a fellow he knew of who was an expert cutter. He also got two top-quality upholsterers and a finisher. The whole finishing process had one man. He’d do something to it, come back and do something else to it – just one man.
We started with that. We built the samples in one of the original case goods plants. Then we took them up to Chicago and showed them on the mezzanine floor of the Palmer House Hotel because I didn’t want it to be in the building. I wanted to dramatize that it was different. From then on, it just grew and grew. Each initial component of the team got two of the best people that he or she could find and trained them. They got them amalgamated into the system and the philosophy and whatnot. We had ups and downs.
I’ll say it again: The only reason we accomplished that is that I had sense enough not to do a damn thing about it except to hire that man, leave him alone, and give him all the backing I could. If there was anything he’d try to do that I didn’t quite know how to do, I’d find somebody that could see to it that he got it done. He’d never had any experience in general management. He’d had entirely production experience
INTERVIEWER: This was in 1958?
INTERVIEWER: OK. Let’s go back to the other war. I understand that during the war it was hard to get materials. You were on an allotment, and to survive, a number of companies did work for the government in the area of military procurement. What did Bernhardt do?
BERNHARDT: We made rotor blades for Sikorsky helicopters, wing spars for gliders, and we made a prototype of what was to be a wooden part of a cargo plane. All this was plywood. It would have been just about exactly the same size as Howard Hughes’ Goose, whatever that was.
INTERVIEWER: Spruce Goose.
BERNHARDT: Spruce Goose. That’s about what it was. Continental Motors was the prime contractor. They’re now part of General Motors. They were to furnish the engines, controls, instrumentation – everything except the bare fuselage. We were to make the tail end.
INTERVIEWER: Tail assembly.
BERNHARDT: Tail assembly. The whole thing was chopped off the back end of it. Drexel had the contract for the fuselage and old Mengel Company in Louisville had the contract for the wings.
By the way, my brother-in-law was the president of Drexel at the time this was done. He started Henredon Furniture Company.
We successfully managed to make these other two things. It was good enough to fight a war with, but as much as they needed, it was repetitive flow. Then it turned out that they didn’t need any.
During part of the war, the Germans had developed a glider sport. They had young Germans all over Germany – full-time, subsidized by the government, framed by the government, as an amateur sport – flying gliders. What it actually was, was that Hitler and Goering were doing the same thing as if they were training parachutists. In the earliest days of the war, nobody, including Hitler or anybody else, knew whether the glider or the parachute would be the most effective; it turned out that the parachute was. But that was why our country was so hell-bent to get into the glider business.
They also didn’t know in the early stage of the war how critical the shortage of titanium and metals would be which are essential to aircraft construction. A lot of them come from South Africa, Bolivia and places like that. They didn’t know how severe the shortage of those things would be. They wanted to prepare an alternative weapon in case they ran out of raw materials. Those were the two motivations for wanting to get into it.
INTERVIEWER: How did you manage to get these contracts?
BERNHARDT: This is strange. We took ours – a very simplified little form with less than a dozen pages and no obligation for the government to pay us anything. We never collected anything, never even sent them a bill. What we wanted was the priority, a Triple-A-1 priority. The reason this airplane thing had such a high one was that the requirement was a species of spruce, which grows in certain areas on the West Coast. They had to pick each individual tree and the engineering requirement was that it could not deviate more than 12 inches. There weren’t very many of those trees; it wasn’t a predominant timber like what they cut so much of – ponderosa pine and all that stuff. I think we could have made something out of some of our oak lumber back up here in the mountains.
It might not have been quite as good and it would have been heavier, but it would have got there.
That one particular thing made the whole. We got a Triple-A-1 priority due to the fact that we had to have that one thing and their airplane construction was a high priority anyway. It might have been Double-A-1, because they weren’t sure they were going to want it at all. What we wanted was the Triple-A-1 priority to be able to stay in business. We never abused it because we didn’t have to. We thought if we had that, we’d be making something to keep our people living and eating and to keep Lenoir and Caldwell County alive for the duration of the war.
INTERVIEWER: How about your reports?
BERNHARDT: It was just the opposite of what I told you awhile ago about our propensity for keeping records; for that one time, I went totally in the other direction. The first time, they sent a colonel or a lieutenant general down here to see the place. He looked around and said, “Where’s your security?”
I said, “I don’t know, sir. What do you mean?”
He said, “You have to have a fence all around this thing, a guard house and uniformed 24-hour-a-day security.”
I said: “If we have to have it, we’ll get it. I didn’t visualize we needed that, but we’ll do what it takes. We’re going to do the job the best we can. If we don’t get it done, it won’t be for not trying.”
Then the blueprints started coming in. I’d send the mail boy with a pickup truck to the post office. They always came in registered mail. You had every kind of security you can imagine on them. We’d do the best we could to find out which ones really meant something. We’d stack the rest of them up neatly someplace labeled by the date they came or something and get on with the work.
It was always a different man. It was a job they’d use for R and R relief. They’d take a fellow off the frontline and send him to Lenoir. Next time, they’d get another fellow for soft work. We used to always offer them plenty of corn liquors.
As I said, they wanted to know about our indexing system for all of these mechanical drawings. I said: “We’ve got it over here. Those came on the 21st of August, and there’s the 26th of August over here. It’s all right there, except the ones that we’re currently using in production.” I made it sound like we had a plant out there somewhere in production. Actually we were doing it in what we called the “oil house”, just a little warehouse where they stored the finishing materials. We don’t use it anymore because it’s all pumped automatically from big tanks, but in those days, we got it all in barrels. We cleaned it out and that became the aircraft factory.
He’d say, “That won’t do at all. You’ve got to have those things locked up in a fire-proof vault.”
I said, “We’ve got a fire-proof vault for our business records; we’ll put it in there.”
My brother-in-law, to use him as a good example, was with Drexel. He did nearly everything they wanted. He built a fence, but at the government’s expense. I don’t know how he did it; he’s a better finagler than I am. He was a great friend of mine. He was a wonderful fellow.
He got them to build him a fence; he got them to buy all kinds of machinery. There’s no way he could have used it on that job at all, but it was just great for furniture. He got a lot of capital equipment and some things done like painting the interior of the places where he was working.
We were just over here hammering away at the thing and trying to fend off the red tape and the bureaucracy. To make a long story short, we finished our part. Nobody else did. Drexel got part of the way along, far enough that they could point to the actual product, the genesis of it.
The old Mengel Company was never much of an account in the furniture business; they’re long since out of business now. They started out as a packaging business for wooden packaging and then got into Colonial furniture. I’ll tell you what put them out of business: They decided it would be a great thing if they had a cocktail party in the American Furniture Mart. They started at 5 every afternoon during the Market. They gave the salesmen instructions: After 5, nobody could talk business at all. It was to be a social hour, going to be on a high plane. “Come see us as friends. We’ll have a cocktail and we’ll talk about baseball. But don’t talk about furniture.” After about three years of that, they had about 30,000 people eating the hot hors d’ouvres and drinking liquor like champagne. All of them were talking furniture between themselves, because that’s all they were interested in anyway, but they wouldn’t let the salesmen talk about it. That, among other reasons, is why they’re not here anymore.
We got ours finished and reported that we were ready. They sent a detachment from Camp Lejeune (North Carolina) or somewhere. They brought a specially built low bed, a huge thing that was just about this far off the ground, and about four jeeps and half a dozen motorcycle riders.
We managed to get the thing out. We had to tear the roof off the building anyway to get it built; it was already halfway out. We got it out and loaded it on. I’ll give them credit for this: They had worked ahead of time. They had a route to get it from there to Wright Field in Dayton, Ohio. They had to go down into northern Alabama, more or less down the Ohio River Valley and turn back up toward Dayton to get clearances that the thing could get through, get under or get over or whatnot. They finally got there.
INTERVIEWER: It may be in a museum up there.
BERNHARDT: It should be. I’m sure it was junked with everything else at the end of the war.
INTERVIEWER: Did you have to bring women in to replace the men who’d gone into the Army?
BERNHARDT: No, we don’t do anything like anybody else. We had the old-fashioned attitude.
There was never a tight enough local market that we needed to employ women. Historically, women had not been employed in case goods. They were always in sewing and upholstery. We went all the way through the war without employing a woman. We were the only people in Lenoir that did it and the only people that I know of in the industry that did it. I guess we hired people that didn’t have any qualifications at all except they had a male gender. As long as you were male, you could get a job and do something. If you were female, it could be Utopia, but no job.
We did, shortly after the war was over, get into hiring women. Now we have them every place that would have a man. They’re doing a wonderful job. I’m a woman’s libber. We’ve got any number of department heads here and they’re male – most of them but not all of them. We’ve got some female department heads and leaders. In half of the departments in this office where a man’s in charge, there is a smart, experienced woman that can run the job at least as well as he can and in most cases, better.
INTERVIEWER: You mentioned that in 1958 you decided you wanted to expand, diversify, and become a larger company. In saying that, you said you had a choice of selling out. Had you been approached to sell Bernhardt?
BERNHARDT: Yes, we have been off and on ever since I can remember. In the early days, it was not like it’s been since the mergers and the leveraged buyouts.
Up until the time we decided to expand, we’d never had any expectation of that decision. We never gave selling out a thought, because we were in the business and had always been in the business. It was a family business – how we made a living. It was how the community got part of its support.
We did have contacts now and then from people. There wasn’t as much of that going on as there has been since. They’ve got the most ingenious ways of trying to get your attention. We may go public sometime. Most all family companies do. It worries my son a lot because he’s active. The buck stops at him and he’s got the family now.
Of course, there are two generations below him – three active generations: mine and my son’s and my grandson’s. His grandson’s sister was here for a while. She quit and now has three babies. In a little more time, we’ll have another generation.
Family businesses almost never last longer than three generations. Families get scattered. They get married and go to California or Florida or somewhere and lose touch with home. All they know about the business is that it pays a dividend at a certain time and that’s all they’re interested in. They are not averse to the welfare of the business because they get the check for the dividends, but they’re sure not much interested in whether it progresses and whether it plows money back into R and D and that sort of thing. Frequently there’ll be a branch of the family somewhere that thinks, “Those folks back there are getting high salaries; they’re getting paid too much.”
INTERVIEWER: Could you give me some examples of attempts to purchase Bernhardt?
BERNHARDT: Attempts to purchase us? Not much, because we never have kept an open attitude about it and we just chopped them off as soon as it became apparent what they wanted to talk about.
First, there are the basic things: You get the mail and it’s addressed to the chairman of the board. That’s me, but I’m not around here much. I’m here every day or sometimes once a week, sometimes all day, sometimes half an hour. I’m gradually adjusting to it, but I’m 85; I don’t think I’m going to last long enough to get fully adjusted.
Then you get calls from the legitimate brokers or people serving as brokerage investment bankers – Goldman Sachs and that type of thing – that do legitimately have somebody in the industry who wants to expand or supplement his product line. The contacts are more infrequent but more viable and authentic. Unless they’re authentic, we don’t get them much anymore.
A large part of our present corporate structure is by acquisition. I built those two plants. The next thing we did was to buy the Hibriten Furniture Company, which is next door to our Plant Number 1, which is at the same location that this was – right up the street here; they were next door to us. We did that not too long after we built this plant to make bedroom furniture. That’s the second of the two plants we built.
Hibriten Furniture Company made a fine line of bedroom furniture – bedroom only. Dr. Robbins, who used to be a dentist, had no intention of staying in the business at all. He sold out and thought he was through with it. This fellow that bought it prevailed on him, since his wife had died, to come back and help out. Partly to help his bereavement and partly because of his loyalty to the people that worked there and who had all their lives, Dr. Robbins agreed to come back and run the thing for this New York investor. He did that for two or three years and each year it got worse and worse.
The fellow just drained off all the liquid assets, sold the accounts. It was a typical piranha acquisition. It just tore Dr. Robbins’ heart apart, because it was an unconscionable thing; it wasn’t the right way to run a business. He was making it practically insolvent.
Finally when Dr. Robbins’ health got really bad, he phoned me from the hospital in Lenoir and said he would like to see me. I’d been by once or twice to see him as a friend, to visit him as one friend to another. I said to the nurse, “Tell him I can come anytime.” I had no idea what he wanted. I said: “I’ll come anytime that he feels like it. I think the world of him as a person. Just tell me when he’d like to see me and I’ll come.”
She said, “Could you come before lunchtime?” This was about 9 in the morning. So I went by there about quarter after 11 a.m.
His relationship with this fellow had gotten so bad, that Dr. Robbins bought the business back. All he got was a shell and a carcass and a dismembered body, but he got it back because he wanted to protect his people.
After four or five minutes of general talk, he said, “I want you to buy my business.”
I said: “I know your business. We’ve lived side-by-side all these years. We know each other like brothers and I had never given any thought to buying your business or anybody else’s.”
He said, “I thought it over and with the condition I’m in physically, I’ve got no heirs except distant cousins, nieces and nephews and whatnot.” He said, “You’re the only one,” or the most appropriate one or something, “to see to it that my people stay on there, stay employed and get treated fairly.” He said, “That’s my interest.”
I said: “Doctor, I know what you feel and how you feel about it. I know your company. I know everything about you and you know everything about me. You bought it back from this fellow. I never knew what he paid you and don’t know what you paid him when you bought it back. But I’ll buy your business and I’ll pay you 5 percent more than you paid to buy it back.” He said, “That’s fine. It’s a deal.”
I told him I hoped he was feeling better tomorrow and got in my car and was home at lunch at noon. I guess that probably goes into the history of the furniture business. That makes a new high in brevity of acquisition. But it was a chain of circumstances. His integrity was impeccable. His business was a known quantity and was geographically next to us.
Not long after that, we destroyed the whole plant. That was a real feat. It was built with a side track that serves several of our plants up that way. It also served his plant at the tail end of the thing.
It’s almost gone now, but shipment in railroad cars was a must; you couldn’t operate a furniture factory of any size without being on a railroad for the finished product.
The building, his equipment and everything were just awful. We finally figured that we could move the building. It had two stories and the top story was where the siding had to be because of the grade of the railroad track. The bottom story ought to have been higher, but it couldn’t be because of the creek out here. We’re hemmed in between the creek and the railroad.
We finally decided that we could go about 40 feet from the south wall of the old plant and build the first section where the machine room, the product, and the flow of production first began. After completing it up to the point where it could function, we moved everything that was usable, junked the rest, and put new equipment in it. Then we got one of these cranes with a clam shell bucket, reached down and dipped up the roof, the sprinkler lines, the piping, everything else and hauled it off. We did that until we finally got the hull one length, say 200 feet wide and 400 feet long. Then we took the 40 feet that we had left and what went from there to the railroad, filled that in and made it into a factory. It was about the dumbest thing you could have ever done, but it preserved the name of the factory and their reputation. They continued to use the employees. I guess it was good in other ways. We now have conveyors that go from one to another for certain things; it wasn’t all bad.
Not too long after that, we bought the Hibriten Chair Company. They made upholstered chairs like the type you’re sitting in – exposed-wood upholstered chairs, which we didn’t have in our upholstery operation.
INTERVIEWER: Did you have to bid on the chair company?
BERNHARDT: No, we just negotiated a purchase from the family, and it was a cash transaction. The first one, we just bought the corporation stock for stock, and this other was just a sale of assets.
Not long after that, we built another plant for upholstery, new from the ground up, which is maybe 4 miles down this way.
INTERVIEWER: OK. How would you describe the company? How would you characterize the culture of this company?
BERNHARDT: The culture? My son and the other main executives that are running this business spent six months doing a serious-minded study of our corporate purposes.
INTERVIEWER: That’s different.
BERNHARDT: Nothing was ever given more thought, study and prayer than the Constitution of the United States. I guess it’s a great thing to have. I think it truly personifies who we think we are and what we think we ought to do about it.
INTERVIEWER: In terms of the corporate culture, those are the principles, the mission statement by which a company wants to operate. But a corporate culture is what kind of things do people, the kind of people who work here and how they fit in. What makes a person – whether he’s in the factory, on a line, in the office, in sales or driving a truck – fit in at Bernhardt?
BERNHARDT: We’ve been here a hundred years, 103 years now. We’ve never knowingly done a despicable or a bad thing to an employee or a member of the community. We were the first people in the furniture industry, in this part of the country at least, to put in a retirement plan. (There were quite a number of them in textiles and other things.) When they put it in, it was 100 percent company funded, and we back funded it to the date of the first continuous employment of each employee. When we set it up, we had, under the IRS regulations, an unfunded debt of heaven knows what, going back to people who’d been here 40 years. That’s due to various things, changes in the government’s rules and so on. It’s been modified, but it was a defined plan with fixed benefits at retirement of age 65.
We were the first furniture company, at least in Lenoir, to have a company cafeteria serving hot meals. We have six plants in Lenoir in this immediate nucleus and there’s a health station and a cafeteria for each of those six.
We were, I think, the only company who never had white and colored signs on the factory toilets. By the nature of the sociological history, the blacks, almost without exception, always went in the same one; the white people always went in the other one. But there was never a sign up to say you had to.
The first cafeteria we started was up at the older part where we had most of the plants at that time. We knew that it was a delicate situation, feeding a mixture of races at eating places. So we designed the thing so that there was no difference – no signs, no anything, except there was a double serving line. On one side there were tables for about the number of black employees that would be using it. On the other side, there was about the same ratio of tables for white people.
The day we opened it for operation, we tried as much as we could, without it being too apparent, to get people to move around and sit. The first few days or weeks, they did sort of scatter around. But it wasn’t long until all the blacks were over here and all the whites were over there. We tried to prevent it. There wasn’t anything we could do.
There were no signs, no rules. But these things were so endemic.
I guess it’s obvious what I’m trying to convey. We never had slaves in this part of North Carolina; everybody was too poor to own a slave and it wasn’t agriculture country anyway. We just relied on coon hunting and making liquor and all the good things you do in the Blue Ridge Mountains. But the race division or segregation – it’s in New York; it doesn’t have to be in the South. I think people in Chicago, New York and Boston, you name it, are just as much aware or cautious of the races. In New York they’ve got Irish; they’ve got Jamaicans. It’s a little simpler in this part of the world because you’ve just got black and white and a few Koreans.
It’s very interesting. They come in just the way they do in Los Angeles, California – come in, start a little shoe shop or something, just work like hell and do a great job. They might run a better shoe shop than anybody in town – do it cheaper, quicker and better. We don’t have it in this town, but they have it in the next town. They’re getting little enclaves of Korean people and they’re doing a wonderful job. They’re good citizens with tremendous drive.
INTERVIEWER: In purchasing a company, do you purchase with internal funds or do you work with banks? How do you finance these things?
BERNHARDT: We’ve done various things. At one time we had a long-term loan with Jefferson Standard. We’ve had intermediate loans. It would be maybe a 10-year loan with a balloon payment at the end or something. The only thing we ever had longer than 10 years was that one with Jefferson Standard. It was for 20 years and we had the privilege of accelerating it by double paying each year so we turned it into a 10-year loan. But it was a 20-year loan with an option to accelerate only one year at a time.
INTERVIEWER: What purpose would you have used this for?
BERNHARDT: We were buying factories and building factories. We built those factories, the first two I talked about, in 1958.
We don’t owe anybody anything whatsoever. That may not be smart business. I don’t think my father would like it. He was an optimist. He made and lost about three fortunes, and he never went into bankruptcy because he had a good enough reputation that his friends, his banking connections and so on never called him on anything. But my personal preference is the other way. I don’t like debt. I like to pay as you go and if you can’t afford Rolls-Royces, then don’t. If you can’t buy it and pay cash for it, don’t buy it on terms. It’s better to just pay cash for a Ford.
INTERVIEWER: Did you work with the local banks as well?
BERNHARDT: Our banking history is sort of unique and very simple. My father was a good friend of Dr. R.A. Dunn in Charlotte, who was CEO and chairman of the board of the bank that has now become Nations Bank. Mr. Dunn had no children, and Mr. and Mrs. Dunn would invite me from Davidson if I could manage to get there. You couldn’t hitch a ride because nobody was going. But I’d manage once in a while at Davidson to get over to Mr. and Mrs. Dunn’s and they’d feed me like I had never been fed in my life. They were perceptive enough to know that a college boy didn’t want to spend much time sitting and talking to two elderly people who had no children. So I went out to the movies or did whatever I could to get in trouble in Charlotte. That’s the kind of relationship.
The other was the great-grandfather that started the trading post and founded the county and all that. They could finance the farmers in the spring – give them a little credit for the seed and fertilizer. They settled up with them when they harvested in the fall.
In those days, there was a pretty viable industry in trapping furs here in the mountains. Those same farmers did a moonlighting job in the wintertime, trapping furs and curing them. They sold them in the spring and settled up. That was a primitive barter system; in every store, most of it was barter. They ran wagon trains down to Charleston, met the ships coming in, bought plow points, coffee and hauled it back here. On the way down, they’d take mountain burley tobacco, skins and whatever kind of produce they could to sell to the shipmaster. The ship master was also the business manager. He had orders within certain parameters, like a Wall Street broker, that gave him certain buy-or-sell limits. He’d buy and sell local product, buy it for whatever he could buy it for.
Business got to be where it was about as or maybe more profitable than running the little store, so my grandfather moved the store up to one of the lots that he and his father had bought in the center of town and built the store there.
Some years after that, this banking business came in. He founded the first bank that Lenoir had. It was a corporation. The banking laws in those days were pretty simple. Grandpa set up a corporation, got a bunch of his friends to put in stock, and they went into the banking business. As it prospered, they built another store building in the middle of the same block and converted the original store into the Bank of Lenoir. It was just a typical, conservative, Anglo-Saxon, mountain-pioneer, squirrel-hunting financial institution.
INTERVIEWER: Did they use that bank to help? Did your father use this to help found the company?
BERNHARDT: I guess he might have borrowed some. I never even thought of that. My father borrowed money from anywhere he could borrow it. He was a wheeler and dealer and free spirit.
The Bank of Lenoir continued to be a small-town bank with no acquisitions or expansions, but it was an exceptionally strong bank. You didn’t have to get much return on your investment if you’d go back to your original cost.
In the very early days of this when North Carolina Nations Bank and, to a lesser extent, Wachovia and First Union, got started in that phase of the business, we were the second acquisition that First Union had. The first one was a group of banks around Asheville that a fellow named Jonathan Woody had put together. They came in here and there was a competitive bank. Every town ought to have two banks, because otherwise they don’t have anybody to complain about the other fellow.
The bank that competed with my grandfather’s bank never re-opened after 1932 when Roosevelt closed it. The stockholders didn’t get paid; the depositors got 10 cents on the dollar or something. That was before the days of the FDIC. It disappeared.
Not long after that, which was good, a group of people got together and started a new bank. It was all right. It stayed solvent, but it was definitely the weaker bank in the community. First Union came in and worked out a deal with them to merge.
By that time, the family management of the bank had disappeared. We had hired management. Direct family and cousins owned most of it, but nobody was active in it. I hadn’t been on the board for about five or 10 years before this merger. I didn’t want to be, because I had a cousin who wanted to do everything just exactly the way he wanted to do it. He wasn’t going to let anybody do anything about it. Why the hell do you need me on this board? To say, “Yes, Cousin Arthur, I think you’re exactly right”?
They kept asking me to be on the board because I was a part of the family and partly because I represented the community. I did finally when I saw they were going to get somebody in there that wouldn’t necessarily be a one-man operation.
That young fellow came to me and said he’d heard about this thing. This was before they’d finalized it and signed the papers. He said, “I don’t know what we’re going to do about this.”
I said, “What do you mean?” He said, “We don’t know whether we ought to merge or we ought not to merge.” I said: “Do you want my opinion? You figure out which way it’ll make the most money for the stockholders and then do it.”
He took the message. I think he thought of a better future for him personally; if he got in the bigger bank, it’d be more room to go up the elevator. In just a matter of days, we got with the president and worked out a merger that took over both of them simultaneously.
I think it’s been a good thing for the community. We’ve got a good strong bank in the Bank of Granite that’s sort of like my grandfather’s bank. John’s done a great job taking a small town, smaller than Lenoir, and building up a really strong, five-county chain of banks. Granite Falls is between here and Hickory, just a small cotton-mill town. Anytime he decides he wants to sell, he’ll have Nations Bank, Ed Crutchfield and all the rest of them just beating his door down to get to it.
You asked about the banks we used. Always, as far back as I can remember, we’ve had the understanding with both of those banks – no matter what the name was at the time – that we’re going to do business with both of them. We’re going to offer each one half of what benefits we could confer with deposits. We’ll ask them both to help us half-and-half on any problems we’ve got and it’s going to be split down the middle. Anytime that one of them makes us a better deal, then he’ll get the business. No matter what. If we’re in trouble and need help, and you’re not quite as willing to help as the other fellow, we’ll go to him. But if we go to him, we’re not ever coming back.
That’s been true for 60 years. It’s just worked beautifully. We’re not big buyers or big borrowers. We don’t borrow anything now. But there’s nothing in the world that scares a banker as much as what he thinks the other banker is going to do. I don’t know any other business where they have that psychology. Also a bank’s image is worth more than the cash he’s got in the vault. That’s our two banking relationships and how they came about and what they are today. Alex, by the way, is now on the senior board of First Union bank.
My grandfather was even better preserved than I am. He was always at the bank first until just before he died. A week or two before he died, there was snow and ice. He left our home, which was just a block from the bank, and as usual walked up to the bank with his walking cane. He slipped and fell on the ice. He broke his hip, developed pneumonia and died within a few days’ time. Prior to that, he was running the bank, along with the rest of the family, just the way he did the day he organized it.
Later, in his less active days, his sister’s son was the successor and protégé. He was about 60, but in Grandpa’s eyes and mind, he was about 18. Cousin Harper (his name was Harper Bell), sold him on the idea of, “Let’s fix up the bank a little bit inside.” He said, “We’re going to patch the plaster and paint and put in a few little improvements here and there.” Of course, he did a whole lot more than he ever let Grandpa think he was going to. He did it a little at a time, so he couldn’t be stopped.
He finally got the whole thing all finished. Grandpa had pictures of all of the members of his Confederate regiment. He was a major in the Civil War. He had Robert E. Lee and Stonewall Jackson and a few others. He had portraits of them all over the whole bank. They took them all down when they were going to plaster and paint. Grandpa got up there earlier than anybody else, as he always did, and when Cousin Harper got there next, there was Grandpa, up on the ladder with a hammer driving a 20-penny nail into the new plaster to hang his pictures. Cousin Harper said, “Major, what do you... Could I help you there?”
He said, “No, I don’t need any help.”
He said: “We’re just real proud of this bank, the way we’ve got it fixed up now. We’ve got it nicely painted and plastered. Right away, we’re going to have a carpenter come in and put a little picture molding right on the wall and you can hang all the pictures from the little molding.”
Grandpa looked down and said, “My hammer, my nails, my bank. I’ll put them where I want to,” and he went right on nailing.
I think this is an even better story. It was customary that every store in the town, every general store, faced the main street and it had a back lot where people drove in with their horses and wagons and hitched them. They pretty customarily went to Mr. So-And-So’s store – at least to hitch up, do the shopping and come back. A fellow came in one morning, spoke to him pleasantly, and went on off to shop around town. In doing so, he had, without my Grandpa seeing it, priced an axe handle. It was 50 cents. He didn’t mention it to Grandpa, but he went over to another hardware store. Later he came back and saw Grandpa. He was going to get in his wagon and he said “Major, I came by here this morning and saw your axe handles. They were for 50 cents. I went over to the other store, and he had exactly the same axe handle, the same brand on it, everything. He just charged 45 cents for his axe handles. I bought one.” He said, “How do you account for that?”
Grandpa said, “That’s very easy. We make 5 cents on our axe handles.” The fellow got in his wagon and left.
INTERVIEWER: Let’s pick that up with the furniture industry in terms of pricing. How does Bernhardt remain competitive in the furniture industry?
How do you think you maintain your competitiveness with other companies?
BERNHARDT: Sometimes I doubt that we do. We’re reasonably competitive or we wouldn’t still be here.
I was going to teach English literature. When the factory burned down, I thought I wasn’t going to go in the family business. I thought I’d teach English. My wife’s cousin, Edward Frying, was an English professor at Davidson when I was there. He made quite a name for himself in those days. I remember this quote: “Be the first for whom something is tried, be the last to lay it aside.”
We’ve tried not to be the last one to get into this or that phase of the business in product, production, advertising or marketing. We also try not to be the first. We don’t want to be the innovator that’s going to take all the hard knocks, blocking the fellow that’s carrying the ball. We’d rather carry the ball. But we sure don’t want to be standing still when the ball is snapped, fooling around in the backfield when somebody clips you from behind. We’ve tried to stay between those parameters. We’ve tried to be pretty far up toward the front, much closer to the front than the back of the parade. That’s a general philosophy. On some things, more socialistic things, like being the first people to put in a retirement system, we have been out in front and stuck our necks out. Those are both things that are influenced substantially by the temperament of the management.
INTERVIEWER: What’s the competitive advantage that you get from having a retirement system?
BERNHARDT: Not really any, anymore. Now everybody has them. They’re not substantially different one place from another.
INTERVIEWER: They were when you were first doing it.
INTERVIEWER: What was the advantage that you saw, business-wise, in making that decision?
BERNHARDT: I don’t think there was any. I don’t think that was our motivation. We, of course, were aware of the fact that pension plans existed throughout the United States. We didn’t have it in the furniture business or in Lenoir, but we knew there was such a thing, obviously. We knew about the obvious reasons for it and against it. I must have thought at the time that this was going to be a coming thing and if we didn’t do it then, before long, somebody was going to.
Looking back on it, I was motivated by two things. One is the feeling that it would be an accepted general corporate practice; we’d grow into that. It coupled with the fact that I felt that it was a way in which the company could share. We didn’t have an ESOP, didn’t have employees owning stock or receiving bonus compensation or anything like that. It was a way in which the company could make a financial contribution to the welfare of our people. It provided recognition for past services, and, hopefully, it would enable us to be more acceptable for hiring new people. Younger people would be more likely to come to us. I did it, but I can’t tell you exactly why. I don’t think I ever figured it would give us a competitive advantage. It doesn’t amount to enough to be significant. It would be in total but not much individually.
INTERVIEWER: How much more did it cost the company to have a retirement program?
BERNHARDT: I wouldn’t have the slightest idea how to answer that in dollars and cents. It was a percentage of the actuary figures, the length of service, and a certain percentage of his earnings at a certain year. It’s the same thing that insurance companies use to sell you life insurance. It was related to a percentage of our current payroll for a current year.
INTERVIEWER: What advantages might a family-run business have in the furniture industry?
BERNHARDT: Increasingly, with these leveraged buyouts, some of them are successful and some of them are not. We did business with all of them. We managed to get out from most of them before the roof fell in. I think the American public, particularly in these Reagan-Bush years, mistrusts the corporate conscience or the lack of corporate integrity. I’m sure there are just as many crooks and scoundrels running individually-owned businesses as there are executives running businesses that are owned by stockholders.
There are not enough family businesses to amount to much more than a symbolic assembly in the retail industry as a whole.
I think there’s some perception that a person who is managing – or people who are managing – an enterprise have their own money and efforts invested, and this tends to make them more worthy of risk than those enterprises that are run by people who don’t actually have a commitment in this world’s goods – “Lay up your treasure in heaven,” and all that.
I run the Banks Bible; they used to call it the Billy Banks Bible Buttons. All my classmates teased me about it. I got interested in the Bible when I first went to Davidson. I had two perfectly fascinating professors; one in particular, they still worship like the Pope. I studied that as hard as I ever studied – the only thing I studied much while I was at Davidson. I just loved it and I don’t think there’s any religious aspect to it at all, as far as I can tell, looking back on it. But I enjoyed it, and at the time I was there, about a third of the student body were pre-ministerial students. Nearly all of them were already pre-enrolled at a seminary somewhere. Once we were through with the two years we had to take, I didn’t take any more of it. I’d had enough.
My mother came down to see me graduate. They called me up to the front and presented me with the Bible medal. (I don’t know who Banks was. He was some predecessor in the hierarchy of the Southern Presbyterian Church, I guess.) It was the greatest thing I ever did for my mother and totally unintentional. I didn’t even know there was a medal. I’d never heard of it and I didn’t spend too much time with the ministerial part of the student body. I did most of mine with the non-ministerial.
That was during Prohibition. Everybody drank; you had to drink because it was against the law. I’d come home and go back. I couldn’t get home but about three or four times a year, at Thanksgiving and Easter. I had a one-gallon charred keg. We’d fill it up with corn whiskey.
I lived in what used to be the president’s house. At that time, it was abandoned. I was there just after the old Chambers Building burned down.
It just wiped out the school, practically, because that was where the classes were held, and the dormitories and everything else were there, too. So they had us living in every place they could find. Conscientious people let out two rooms – not to take in boarders but to help the college.
Anyway, we kept this one-gallon keg up in the attic, over the closet. You had to shake it occasionally to keep it stirred up enough so that all of whatever it is that makes corn whiskey so different than bourbon liquor made out in Kentucky didn’t settle. It turns it colored. We had a little string and we’d go in there every day or two. Somebody, any boy that lived on that hall, would pull the string to shake it a little. We didn’t drink much, but we were just breaking all the laws we could think of. Anyway, I won the Bible medal. I guess it was predestined in spite of the corn liquor.
INTERVIEWER: How would you describe your activities as the head of Bernhardt Furniture?
BERNHARDT: Do you mean throughout history or today?
INTERVIEWER: Did it change over time? From the time you took over in the ’30s?
BERNHARDT: When it started, my father was up in years and not far from his eventual last bout with cancer. My older brother was the only member of the family in the business except my father. He, by the way, was more like a father and my father was more like a grandfather. My mother was 40 years old when I was born and my father was about 45. I was the last of five children – one stillborn, four survived. One brother was 12 or 14 years older than I. He was married but never had any children. I had another brother who was an attorney, who went to Davidson, then to Duke. He passed the bar and died two or three years after that in an accident. I also have one sister. My older brother didn’t have very much in common with the two members of the family between him and me. I didn’t particularly realize it at the time, and I don’t know that he intentionally did, but he sort of adopted me as something more than a younger sibling.
I told you about going into the lumber business when I got out of school and started full-time work. My brother was at that time doing both but doing mostly furniture, because I was pretty well taking care of what little was done with lumber. When my father died, it didn’t make too much difference as far as the management of the business was concerned because, for six or eight years prior to his death, even though he was still in good health, my brother was active CEO.
I worked with my brother which was as ideal a working relationship as any two people ever had. I think we understood each other and admired each other deeply. We weren’t demonstrative of it, but I think we had deep affection for each other as people. I meant a good deal to him, being sort of like his child that “looked to follow in my footsteps. This is my child I’m proud of.” That kind of psychology. By the same token, I was following in the footsteps of my “father”. That kind of thing.
In 1948, my brother committed suicide. He’d always been subject to pretty severe manic-depressive swings. We all have them. With some people it’s just bad enough that they can’t take it. A fellow feels a little better one morning than he does the next – that sort of thing. I’ve had a little more jag than most people. We’ve all got them. It’s just how often and how deep and so on.
Anyway, he died suddenly (I wasn’t even in town) as the result of a suicide attempt in 1948. I was born in 1906. I was 42 years old and not too far behind where Alex is in experience and ability to function in the business or direct the business. From then on, I was just pretty much all on my own, until 1958, when I decided to set this course toward growth, expansion and diversification of product and brought in Wesley Collins. From that time, I not only had Wesley as another strong player on the team, but we’ve grown to the point where we have a pretty strong basic structure of sales managers. I guess you’d call Wesley vice president of finance and operations. He was a home-base executive and had general oversight of the different departments like accounting and purchasing – everything other than sales and production.
Wes Collins was with us for 18 years. For about the last half of that, I made him president of the company.
I’ve done two things I’m proud of. I’m proud of not thinking I knew anything about making upholstered furniture. I’ve also always operated on the fact that I wasn’t going to be here and live forever. You’d be surprised how many people, in how many different kinds of jobs mentally never conceive that they aren’t always going to be there, always going to be doing what they’re doing and doing it equally well. I was smart enough to dodge that one somehow. Even though it’s a family business, I’ve always tried to conduct myself as being aware of the passage of time.
After Wesley was with us for nine years as a vice president, primarily in charge of the upholstery division, I made him president. We had two CEOs: me and Wesley. It worked all right. We’re not in the big corporations and didn’t have any trouble about that. He did all the things that he did best, and I did the things I could do best, and we shared them and tossed them around. Then Wesley was made an offer by Paul Broyhill.
Paul made Wesley an offer to become president of Broyhill. I don’t know whether he even had it in mind at that time that they were going to go public or sell out. Wesley came to me and said he was resigning, leaving. He said he’d stay on as long as I thought he should. He didn’t come to ask for a counter offer. He’d already settled it, told Paul he was coming for sure. Then he came to tell me he was leaving, which is about as ethical as a man can be.
At that time, I thought Alex was fully capable of taking over and being in the family, of course, didn’t hurt any. Somebody said there’s nothing wrong with paternalism as long as you kept in the family. So Alex became president. He and I work together, along with the top people we have here now.
For the last 10 years, I’ve fought and struggled, trying to adjust to a new way of life. I’ve made pretty good progress. It wasn’t good for a long time. In fact, it was about five years just prior to that that I became an alcoholic.
I’d been a social drinker, entertained customers, and always had more tolerance for it than most people. I was always the one at Davidson who could, if you could get a car, drive back from Charlotte. We went down there to dances, and I was always the one that was the best able to drive home. I’ve taken 2,000 furniture buyers to bed in Chicago and California. We’d go out and have drinks. This was back in the days when drinking was very common-place. It’s surprising how much less drinking goes on in business in this last generation or so. A lot of them are just plumb teetotalers. I don’t know whether that’s good or bad. I’ve had as much to drink as anybody else in the crowd. We’d do whatever we did during dinner and drinks. Nearly always, there was some fellow who just couldn’t take it. I was usually the one to get him in the cab, take him back to the hotel, get the room key, get him upstairs, dump him in the bed and go on home.
Looking back on it, I think when I was about 65 years old, I started drinking addictively. I’d had enough practice by then. I didn’t have to learn how to drink whiskey or gin or whatever. That was for about five years and I just got worse and worse, got totally out of control. I didn’t realize it. The addict, whether it’s drugs or alcohol or anything else, is the last one to ever realize he’s got a problem. They know they have hangovers, and they’re drinking too much or have had too many whatever you have when you have drugs. They don’t really think they’re addicted. As soon as I realized I was, I was the most earnest, like I was about that Bible study. I went to a treatment center in Greensboro. They never had anybody come there who was more anxious to graduate with honors. I graduated Magna Summa Cum Laude. And I haven’t touched a drink since.
When I look at the lives I’ve seen where it’s been destructive to a person throughout a lifetime, it does irreparable damage to his family or his friends – not just wrecking a car but financially and socially. Nobody will ask him to a party because he drinks. They’d like to have his wife, but they don’t want him – all those things.
It just makes me want to get down on my knees and thank the Lord for how good He was to me. I had five years of it, concentrated into that one period. Before that, I was, I hope, a useful citizen, father and husband.
After I became sober, I was still pretty active for about five years, though not as much as I used to be; I didn’t need to be. But these last 10 years… When I was at home, I’d think “I ought to go down there. Surely there’s something I can do down there. I’ll just go down and see what’s on my desk.” But I didn’t much want to go, because I knew what I was going to have. I’d come. It would take me a half an hour or two hours to skim through what’s here and read some reports. Then there was nothing to do. So I’m uncomfortable.
I can’t just quit here and go on home in the middle of the day. It isn’t fun, but I’m winning. I’ve gotten to the place now where it doesn’t bother me much. I’m pretty happy both places.
INTERVIEWER: You talked about purchasing companies, but you also did some joint ventures. I wonder if you might talk to me a little about that. Tell me about the joint ventures.
BERNHARDT: I did one joint venture in furniture and three others. One’s particleboard; one is adhesives – glues, furniture glue, other glues; and one is a sawmill and veneer mill, which we now own totally.
The furniture thing was a 50-50 ownership between me and my lifetime, boyhood, barefooted friend Roger Triplett, who founded what was first Blowing Rock Chair Company and which later became Blowing Rock Furniture Industries. Then it sold out to Magnavox. That’s when he retired. He stayed on for a while and operated as Consolidated. I believe he walked off and left before Singer took it over. What now exists is Singer, but they’ve pretty well slaughtered and butchered it. Only the carcass is left now.
INTERVIEWER: I’d like to start with the furniture thing. Is this a usual venture in the industry?
BERNHARDT: No, as far as I know, it’s pretty unique. It was unique in each aspect of it. Roger Triplett and I grew up together. We used to court the same girls – not the same ones, just in the same cars. He spent a good many years as a sales representative in the Mid West. He and his brother-in-law accumulated some capital and decided they didn’t want to spend the rest of their lives traveling. They decided to come back here and start a furniture factory.
For a while, they were taking the output of a factory in Hickory, along with selling the product from the factories they represented. One way or another, they went into what they started as Blowing Rock Chair Company. Their objective, at the time, was to make a certain type of chair that all stores carried. They were traditional chairs with a little rosebud carving, a little exposed wood with an upholstered seat. Some of them had ladder backs; some of them had lyre backs.
Macy’s and Gimbels used to run full-page ads showing all those different chairs at $99 a chair, $49, or whatever. They built the factory to make chairs. After being in it not very long, they saw an opportunity to move into full dining room furniture, to make tables, case goods and chairs. They did that for I don’t remember how many years. They ran a very successful business. The brother-in-law was older and his health was bad. He had some problems. He wasn’t contributing very much to the operation of the business, but Triplett was.
The mother of Bill Stevens was as smart as a whip and she had a million-dollar personality. A customer would call up and complain about something, and before he got through, she made him feel good and he’d bought another piece of furniture. Oh, she was the greatest. She died recently, I’m sorry to say.
But she and Roger ran the business. He was never a detail man; most salesmen are not. If they’re good at details, they’re not going to sell anything. That’s one of the few things I’ve noticed about a salesman. You’ve got all kinds of different people who are good at sales. None of them have any common denominator, as far as I can tell, except if they are able and inclined to be methodical about the paperwork, extending the figures over, adding them up right and so on, they’ll never be successful as salesmen. There may have been one or two like that. The moral: They mess up everything they do if it has to do with anything routine or structured. The less of that they have, the more they’re able to sell.
Well, the two of them ran this business very successfully. They created a real fine business. Harold Coffey ran the Kent-Coffey Manufacturing Company, which is a family-owned company typical of all of them around here, including ours. He had no children and he had a good business. By the way, it’s the business that originally put both of these two fellows on the road selling. They started out from scratch selling Kent Coffey’s line of furniture and one or two connected lines. He decided he wanted to sell his business. He was a little old for it, but he was also highly sensitive. When he was a little boy, he used to always buy all the other boys’ ice cream cones at recess because he wanted to curry favor. He was a complex character.
INTERVIEWER: This is Coffey?
BERNHARDT: Coffey, yes. Anyway, he decided he wanted to sell his business. The rumor got out that he was considering this. I don’t think anybody knew who had let it out, but the rumor was enough just to drive Harold up the wall. He went over here (you can see it out this window) and built a factory in that creek bottom without any idea of what he was going to make with it. (It’s no place to build a factory, in the first place.) Purely to save his own ego and to prove to the public that he wasn’t about to sell out, he was over here building another factory.
They finally did something with it. They had a consolidated lumberyard near it. They brought the lumber in and hauled it to his main factories where they did all the work. He was in the bedroom business. They had a conveyor system. Dressers over a certain length wouldn’t go through the thing. He’d get it to the assembly point over there. He’d bring it back over here and assemble it right where the lumber started from. He’d finish it, bring it back over to where the other factory was to put it with the rest of the furniture to ship. That’s how badly he needed that factory.
Not too long after that, he did sell out to Magnavox for a cash sale. I guess maybe that was one thing that sort of implanted the idea in Roger Triplett’s mind. Some years after that, he made a deal to sell to Magnavox. His was a stock-for-stock deal.
Walter Spainhour was the son-in-law of a man who originally started a chair factory in Lenoir. His father-in-law died. He took it over, developed it into a nice little business of making solid Colonial furniture.
Walter was a fine fellow, a nice fellow and a member of our Presbyterian church. It doesn’t necessarily mean you’re good, but you’re at least Presbyterian. He was never a good manager. Some things that he did for himself, he could do well with, but with direction and management, he was never too good. Sales, dealing with people and relationships and so on, just weren’t natural to him. He was uncomfortable. Walter was just about one step out of Chapter 7, except then I don’t think they had 7s and 11s and all those things.
I wish to hell we didn’t have them now. It’s one of the worst things that ever happened to this country, all the bankruptcy laws. It used to be when people went bankrupt, they went bankrupt, took everything they had, divided it out, saved enough for the widow and the orphans to have a house and that was it. Now, you go bankrupt and the next day, you turn around and set up an acquisition for some factory, some company that’s bigger than you are.
Walter came and approached Roger Triplett and me. He knew that we’d had some success in the selling, designing and merchandising end of the business. He wanted to know if we’d be interested in buying into his company and letting him do the manufacturing and so on; we’d do the merchandising, the sales and so forth. To cut things as short as possible, it wound up that way. He had one-third ownership. He was the producer of Blowing Rock Furniture Company. It was owned by the corporation, not individually, and Bernhardt did the sales and helped collect the accounts and that sort of thing.
We found out that Walter was far worse off in debt and his inventory was overstated. He wasn’t near bankruptcy; he was plumb way down below Chapter 7. It was just that nobody had found out about it, including him. The two of us put up quite a bit. We endorsed notes to a pretty substantial amount, a good deal more than we paid for the stock, to try to get the thing on its feet financially. And we did.
We thought: “Now we’re all right. We’re not burdened with debt. People are not beating the door down trying to collect for supplies.” It wasn’t long after that, we found that Walter just simply wasn’t capable of running the production end of it. This is no disrespect to Walter. These are just facts, business facts.
We told Walter, “We’ve got to do something.” Really, the stock was worth nothing; the business was worth nothing. It was gone, other than this borrowed money that we’d put into it. We bought Walter’s stock and paid him a pretty fair amount. We paid him maybe more than we paid for the first third we bought. But it was worse off than when we bought the first third. It sounds crazy.
Then we got Roger’s uncle, Grover Triplett, to take over production. He had been our production manager for many years and was one of the best ones in the world. He went down and took over the production including the purchasing of the lumber. Roger and I, Blowing Rock and Bernhardt, redesigned the line, got it sharpened up a good deal. We turned the Blowing Rock and the Bernhardt sales organizations loose, selling what amounted to identically the same thing – the same finish, the same wood. If it was a ladder-back chair, we’d have three ladders in Blowing Rock’s chair and four in Bernhardt’s. This other chair was a captain’s chair and we’d have seven spindles in the back of his and only five in the back of mine. It was enough for a buyer at a department store; they all looked alike anyway.
All of it was just alike. You couldn’t tell who made what. It finally reached the place where we just simply changed the numbers on the cartons and the price list. For a factory the size that it was, there was not one, but two sales organizations selling that one thing. It was a type of product that didn’t have to be restyled every Market. Nothing changes about Colonial furniture, except you’re going to bring out a painted one as an accent color or something.
I don’t remember how long this lasted. But that thing made more money per dollar than anything in percentage of sales or investment or anything else. We couldn’t lose. Then Roger decided to sell out. He called me and told me that he’d made the decision and it was going to be a stock-for-stock deal. Consequently, he would have to be able to have my half. It was then half, 50-50. We’d bought out Spainhour.
He would have to have my stock. Either I’d have to sell to Magnavox or he’d have to acquire it in order to make the transaction non-taxable. He had something like $25 million involved. I had a couple of million and I was in a position where I could have wrecked his whole plan of salvation. He had a small investment he’d built up. His tax cost to the stock was 1 percent of what he was getting for it or something. They had to have 100 percent of the stock or it wouldn’t have been legal. It would have been taxable.
I said: “I don’t want to do it. I’d rather keep the whole thing, but that’s going to mess you up. It means so much more to you than it does to me, so we’ll go along. Whatever you work out with Magnavox, we’ll go along with it.” They did and settled the deal. Magnavox took our half as well as his half of this other thing. After a few years, they sold out to Consolidated, and a few years later, they sold out to Singer. That shortens up a long story for you.
You mentioned joint ventures. I investigated particleboard back at the time when nobody knew what it was, hardly. I went to Germany and stayed over there awhile, seeing how they made it. I decided it was the coming thing. I came back over here without knowing anything about it and found that the Cavalier Furniture Company had one of the earliest ones that was ever made – German-made, originally.
Their main line of business was making these metal boxes for the Coca-Cola Company, where the opener is on the side; it was a red Coca-Cola box and you lifted up the top. They’re sort of out of style now. They use other kinds of dispensers.
They weren’t getting along well in the furniture business and the Coca-Cola business was making them millions, so they were phasing out their furniture business. I bought their particleboard plant. I bought, along with it, their superintendent, who knew all about it. I moved the particleboard business over here and him over here. And the one thing I was sure of, from my studies in Germany, was that things were not profitable unless you could run it full-time, 24 hours a day. You could have everything else about it perfect, but you had to run it full-time; it was just that kind of a business. If you did, you could automate it so it took practically nobody to run it.
I went to Drexel first, later to Thomasville, and then to the successors of the Kent-Coffey thing and induced them to come in as equal shareholders in order to get the volume that was necessary. They went for it. We set it up over here, and it’s been running 24 hours a day ever since. It’s having some rough times right now.
Borden and about three other large companies had control of the furniture adhesive glue industry. There was a fellow that used to work for them that had a little glue plant up here on the side of the hill. He was just sort of grinding out a few pots of glue, and he made it just as good as anybody else. I bought him, his pots and his knowledge, moved it over here and got another fellow who really knew more about it. Then I went to these same people and asked them if they wanted to come in on it, and they did.
It’s been very successful, up until recently. Right now, neither of them are doing any good at all. But they will and they have.
If we never make another dollar, we’ve made more return on the original investment of those than I ever dreamed of making here at this company.
That’s a set of special circumstances. All of the stockholders were, at that time, family-owned. Well, Drexel was public, but it was controlled locally. Otherwise, you would have had to have 15 Wall Street lawyers to ever put the thing together. We just shook hands, went on and did it.
INTERVIEWER: This is Friday, the third of September, 1993. I’m in Lenoir in the office of John Christian Bernhardt. We’re going to go over a few questions that weren’t covered in his first interview.
Your brother-in-law is Henry Wilson, who is your sister’s husband?
INTERVIEWER: Did he grow up in Lenoir? Can you tell us about that connection?
BERNHARDT: He came from Gastonia (North Carolina) originally. His father was a businessman in Gastonia. He finished Harvard Business School and went into the cotton brokerage business. After a few years, after he and my sister were married, he came here and was at our company for three or four years.
INTERVIEWER: What was your sister’s name?
BERNHARDT: It’s Ella Delight, but she’s known as Dell.
Then Henry went to Drexel. It was when Mr. Frank Huffman died. About the time World War II came along, he left Drexel and started Henredon.
INTERVIEWER: What was the date of your retirement? Did you ever have a formal retirement?
BERNHARDT: Theoretically, I never have retired; I’m still employed and working. I came in pretty often until my wife had an illness in the last year or so; I spend more time at home than I used to. They don’t really need me, and I try to stay out of people’s way and not mess with anything unless somebody asks me for something, which is not very often.
INTERVIEWER: Everybody who’s retired probably envies you being able to keep on working. I have yet to find anybody that’s really happily retired.
BERNHARDT: Some people do that. My wife’s father was very busy all his life and when he retired, he just quit. He liked certain things; he liked gardening, golf, people, the Chamber of Commerce and civic things. He stayed busy from then on, happy as he could be.
I used to go to High Point, selling lumber, back when I was in the lumber end of our business. I used to call on the Tates. There were two Tate families.
INTERVIEWER: One of them was Tate Furniture and the other was Continental. Our factory was making buggies when you were in the lumber business.
BERNHARDT: That’s the year I went off to college. It was about 1927 to ’30, ’31, somewhere in there. I spent more time in the lumber part of our business than in the furniture part.
INTERVIEWER: After your retirement, what has been your principal activity? With no formal retirement, that’s a little hard to separate.
BERNHARDT: I’ve always been active in community work of various kinds. I don’t do as much of it as I used to, but I am still involved in a very minor way with our hospital, which I helped found. They originally set up a foundation that they’re trying to use for money-raising things. They wanted me to participate in that, and I told them they couldn’t count on me for much work, but if they wanted to use my name they could. My wife and I both spent quite a bit of time on Hospice, as volunteer workers for Hospice. We’d take a certain patient or they’d assign a certain patient. We’d make calls and stay with them.
INTERVIEWER: Is it Hospice of Caldwell County?
BERNHARDT: Yes. We have a unique thing. It’s the only one in North Carolina and there are only a few in the United States.
INTERVIEWER: Very active.
BERNHARDT: The place is located where my great-grandfather’s home was located. It started there. The man who was the spark plug was our Presbyterian minister at the time; he’s now an editor of the church paper. We built what would be the equivalent to an intensive care unit as a separate building adjoining the old original family-owned place.
Prior to that, we did what everybody else who runs a Hospice program does: When someone had to be hospitalized, they’d take them to the general hospital, whatever hospital they might have in the community. In our case, now we have this thing. Someone reaches a final stage where he has to be hospitalized but frequently lives several months after that. He has to go to the hospital to have some procedure, tests or something. Now with this facility, all that’s done at the Hospice headquarters.
The rooms are furnished like a home living room. The atmosphere wipes out as much as possible of the hospital institutional atmosphere. Also, the same nurses that have been visiting in the home come with them to work with them at the intensive care place; they don’t have to adjust to a new set of nurses and that sort of thing. They have space up there where the families can visit privately and it doesn’t cost them a cent. There are one or two bedrooms for rare cases if somebody needs to sleep there for their purposes – not for those in Hospice. There’s a bedroom facility that they can use. It’s a unique thing.
INTERVIEWER: Is it for patients or for families?
BERNHARDT: For both. It’s for the family that has a patient in the unit. There are six beds. I don’t know that they have used it more than once or twice.
In the old original home place, there is a bedroom and a little kitchenette for guests; for example, if the family has somebody coming in from New York and they can’t conveniently take care of them at their home, they can stay there. The whole thing is the logical extension of the conventional Hospice program. It doesn’t take the place of the home visitation. The objective still is to treat the patient in the home with the family.
INTERVIEWER: Do you have any interest in golf or any sports?
BERNHARDT: Not anymore. I used to be interested in a whole lot of sports. I gradually gave up most of it when I was middle-aged and very busy – or I thought I was – and I didn’t have time for golf. I gradually dropped one thing after another and wound up with nothing except spectator sports. I used to trout fish, and I used to keep bird dogs – raise and train bird dogs. This goes back to my boyhood and early manhood. I used to do a lot of quail shooting, and occasionally, I’d go with friends rabbit hunting and that sort of thing.
I used to swim a lot. I built the first swimming pool in the county, just a few miles out of town. I built it to have a place close enough to go to on the weekends; somewhere that wasn’t too hard to get to, but still it was away from home.
It was a junior Olympic size because I knew that my children had friends, and they had friends, and they had friends. I knew once we had the place, we’d have it swarming full of people, which was all right.
As a person of my age, I’m not able to do much. My health, I think, is reasonably good for my age, but I don’t keep up with any sports. I watch a lot of football, professional and college, on TV. I also like basketball. I don’t have any interest in baseball.
I used to play baseball in high school. I was shortstop on the high school baseball team. I played guard on the basketball team. I played quarterback of the first football team that they ever had here. At that time, football was strictly a college sport. Chapel Hill had a team. They had it for years. It was a pretty good one. Other colleges like Davidson College had teams, too. Teams in high school were just beginning to exist. The first season we played, another fellow and I were the only ones that had ever seen a football game. I’d never seen but one or two. I had an older brother that was at Davidson, and I went down to see him once or twice and saw a football game.
INTERVIEWER: Did you play in college?
BERNHARDT: No, I wasn’t big enough. You didn’t have to be all that good to play for Davidson, but I wasn’t even good enough for that. I went out and played my freshman year just for fun.
I managed the baseball team. It’s hard to believe now, the way things have changed so much, but as manager, I made all the schedules. I’d get in touch with schools around the state. The longest trip we ever made was when we went to Atlanta and played Emory. It was up to me to contact the fellow down there and work out who’d pay for the transportation and the whole thing. The coaches coached and whoever was the student manager their senior year did the rest of it. It sounds hard to believe today.
INTERVIEWER: They work ahead on their scheduling now.
BERNHARDT: Yes. Sometimes we wouldn’t know who we were going to play two weeks in the future. I guess that was one thing that made it fun. It was about as non-professional as you could be. Of course, Davidson’s a small school.
INTERVIEWER: You have a long family association with Davidson.
BERNHARDT: Yes. My father, my two brothers, both of my sons and two of my eight grandchildren went to Davidson. A similar thing happened on my mother’s side of the family. There’s a Harper branch and a Bernhardt branch. Mother’s a Harper.
INTERVIEWER: Who in your family were trustees at Davidson over the years?
BERNHARDT: My grandfather Harper was a trustee. I don’t know whether my father was or not, but my uncle and his son were. I was and my son Alex now is. He’s still active. He was the first trustee that was chairman of the board of visitors. That’s sort of a PR thing to get people back to school.
INTERVIEWER: What about your association with the furniture industry association, SFMA? I see you have a Ryan award, which is the highest award they give.
BERNHARDT: Yes. I had pretty much the same relationship that most everybody back in those days had. In the older companies, I was on the board of directors off and on for heaven knows how long. I spent a lot of time on the marketing association. I don’t want to sound egotistical, but I was the one most willing to spend the most time on it.
It was in that crucial period when the Southern Market hadn’t reached enough promise to dispense with the Chicago Market. Chicago got more objectionable for all kinds of reasons.
INTERVIEWER: It sure did.
BERNHARDT: I think there were about 12 companies represented. We met informally at the Drake Hotel and places like that during Chicago Markets. It was totally informal. There wasn’t any structure to it. The upshot of it, gradually, was that as people’s leases expired in Chicago, they’d come down here and either build a showroom or use space they had in the plant somewhere, convert it to a showroom. Then more and more people came down to what they called “Premarket”. Then they went on to Chicago. Gradually, Chicago just faded out entirely and it was all down here. There was awhile when it was scattered all around instead of being so highly specialized.
INTERVIEWER: They had the Figure Eight Furniture Highway.
BERNHARDT: Yes. That was gradually superseded by what we have today, which is located in and around High Point, of course.
INTERVIEWER: What about the very beginning of the Premarket, the spring and fall Market? I talked with Howard Walker about Burt Tuxford with Drexel, who started bringing people down here. We talked about some of the things Drexel did in the spring and fall. Were you involved in any of that?
BERNHARDT: Everybody was. I don’t know whether we encouraged them to come, or they sought out the opportunity. It was sort of a mutual thing – to serve a mutual need between the manufacturer and the larger retailers.
The greatest difficulty we had is still with us, but it is not as bad as it was. It’s trying to settle on one uniform opening date. We’ve fought that battle up and down. I don’t know how you could possibly begin to even try to do it today. But we got every member of this Market Association to put it in writing. We tried it all kinds of ways and somebody said, “I didn’t understand it this way,” or that way. It was just a simple letter, but we got it on record, on paper, that they would observe the uniform opening date. For a good while, that held it.
INTERVIEWER: Right at the end of the previous interview, you were talking about joint ventures – the particleboard plant and the glue plant that you were involved in.
BERNHARDT: The particleboard plant came before the glue company. In the early days of particleboard, nobody in this country knew for sure whether you could use it – whether it was safe to use it or whether it warped well or fell apart. Nobody knew much about the stuff. At that time, most of the technology was in Europe, especially Germany.
INTERVIEWER: You bought the plant from the people in Memphis – Cavalier?
BERNHARDT: Yes, Cavalier.
INTERVIEWER: You mentioned bringing that over here with the guy to run it.
BERNHARDT: Yes. Going back a little before that, I went over to Germany and spent awhile trying to learn what I could about particleboard, to see whether it had any future or not. There were some big plants on the West Coast but practically nothing in the East. I came back feeling like it was going to be the up and coming, it would to be used and would probably be improved on as time went on.
That’s when I decided to try to get into it. I negotiated with Cavalier, who was closing up the furniture end of their business. Their major business was making metal boxes for Coca-Cola Company. I don’t know how that fits in with furniture; it didn’t really, but I guess the principal owners and management got into both. Anyway, I arranged to buy the thing and bought a machine tool place; it was a total failure. I don’t remember now who was involved with it, but they weren’t local people. I bought the plant, the building, real estate and everything. I moved the machines from Chattanooga over here.
At the same time, a fellow named Bud Weber had been the plant manager for Cavalier’s total furniture plant. They were closing the thing out gradually. He saw there wasn’t any future to it, so he agreed to come over here. First he agreed to move it and to get it going, and then he agreed to stay on and run it, which he did until his retirement.
The one thing I learned in Germany was that the only way you could make it economical was to keep the thing running 24 hours a day. I knew that our consumption wouldn’t begin to do that. I don’t remember whether I committed us to buy this Cavalier thing before or after I got these people involved. Anyway, I talked to Mr. Robert Huffman, who at that time was head of Drexel; Tom A. Finch and maybe Jim Lynch, with Thomasville; Harold Coffey, who operated Kent-Coffey Furniture Company; and Roger Triplett, who operated the Blowing Rock furniture business. Later, Kent-Coffey and Blowing Rock merged together into Magnavox and then on into Singer today. There were five shareholders originally and then it became four.
It has operated very successfully throughout all these years. It’s had a difficult time in the last two or three years for economic reasons, but everybody has.
These things are just a continuous operation. A machine is a total factory. Weber went to Germany and selected the component parts from the German manufacturers, the machine tool people. He set it up so we had two lines: one to make a homogeneous board of rough particles that was only suitable for five-ply construction. The later edition was a three-layer board with a smooth face and back that had sort of a spongy, accordion-style setter. That’s usable in three-ply or five-ply or whatever you want. We have two lines of machinery going. I believe that more than covers particleboard.
INTERVIEWER: And you keep them both in operation 24 hours?
BERNHARDT: Yes. There are times occasionally when they’re not, but most of the time they are.
There were just a few large companies making furniture-type glues. A fellow named Homer Yarin had been an assistant manager for Borden or somebody. He had the idea of starting a small glue company of his own. He came to Lenoir and put up one. The product wasn’t too good. Homer was a nice fellow, but he wasn’t the best manager in the world. We bought what we could from him just to try to counteract this monopoly of these big glue companies. I can’t remember what tipped the scales, but I bought it. I got the five companies together and decided to go into it.
INTERVIEWER: A joint venture sort of thing.
BERNHARDT: Yes, from the beginning. I bought Homer’s glue company, then went to these same people and asked them if they would be interested in going into it. The nature of the glue manufacturing business, for furniture at least, is such that it doesn’t have to run 24 hours a day – just open the valve, mix the stuff, put it in a kettle, and cook it up; you can have it most any size or any rated capacity. So participation wasn’t a big factor, but, of course, it helps. We couldn’t use the whole output anyway.
The result of that was that we bought Homer’s place, moved the location, built what was an up-to-date, state-of-the-art, small glue manufacturer, unlike the particleboard company, which only supplies the stockholders. The stockholders use more than it can supply, so everybody buys on the open market, and they buy from their captive resource. But the glue company is unlimited in the amount of volume it can produce and what you can do. The different managers started handling various glues from Germany, mostly things that were unusual or primarily for furniture only, that sort of thing. It sold glue wherever it could sell it, all over the United States. Later, Bassett – a big user – was interested. About the time that they put in a particleboard plant of their own, they got interested, and they’ve been the more important dominant factory ever since.
Later, we built another plant up near Martinsville because it was more centrally located when they began to develop customers in not only Bassett, but other Virginia manufacturers.
INTERVIEWER: A duplicate of the operation here.
BERNHARDT: Yes. They both still operate. The home office still stays here, but the capacity of the plant in Virginia is bigger than the plant here.
INTERVIEWER: Is there any connection between the glue and the particleboard, except that the particleboard, I assume, is a pretty good customer of the glue company?
BERNHARDT: Yes, the particleboard plant here does buy from the glue company. Some of the others, like Bassett, for instance, use a different source. They make a different kind of board. They use a lot of it. They buy a lot of glue from the glue company, but as far as I know, with the kind of boards they make, it is not practical to buy from this company.
INTERVIEWER: Going back to manufacturing just a little bit. In recent years, there’s been a very major impact from environmental regulations. I don’t believe we talked about that at all.
BERNHARDT: I don’t know as much about it as people who are more active in the business do. It’s all come along in my later days and I’m not as well informed on the subject. We’re having the same problems with it that the industry in general is having. They’re working on trying to develop finishes that are not lacquer-based or the type of solvents that go into traditional lacquer finishes – water-based ones instead. We’ve got problems with the exhausts from the dust system, trying to capture all that. We pretty well licked that problem. Now we’ve got the problem of the exhaust from the spray booths.
INTERVIEWER: It takes major amounts of money to comply with all the regulations.
BERNHARDT: It does. Also, we try to observe all the OSHA-type regulations as strictly as we can. But no matter how hard you try, they find you; they say that you have to do this or that that you haven’t done; you didn’t know it was needed or required.
It’s not nearly as big of a problem as the EPA thing. When the rules are sensible and administered sensibly, it’s a great thing. We don’t want our people hurt anymore than they do.
INTERVIEWER: Of course not.
BERNHARDT: The only problem is when you run into some bureaucratic kind of personality that wants to throw the book at you over some fine print. But I guess we’ve gotten along with that as well as you could expect.
INTERVIEWER: What is your feeling about OSHA, the environmental regulations and such concerning activity outside of the United States such as NAFTA, the North American Free Trade Agreement?
BERNHARDT: I’m surprised you don’t hear more people talking about that thing. I can’t conceive any possible way that it can be beneficial to the United States to be in partnership with Mexico. I just don’t understand why it hasn’t been a much hotter topic than it has been. Maybe it’ll become so from here on. It makes sense for us and Canada to work together, I think – somewhat similar backgrounds. I can’t see where we’d have anything to gain whatsoever by any kind of a relationship with Mexico. I can see all kinds of things that would be detrimental to the interests of the United States. I hope they never do it, but I don’t know.
INTERVIEWER: In Mexico, the environmental regulations are absolutely zero.
BERNHARDT: They just don’t have any.
INTERVIEWER: They don’t have to put any money in that. No OSHA.
BERNHARDT: They’ll have what they have in Taiwan: people going around to the banks, in the public, on the streets, to a restaurant or a department store wearing masks over their faces because they can’t breathe that terrible air.
INTERVIEWER: What is your favorite charity? Would that be Hospice?
BERNHARDT: I guess the Presbyterian Church, Hospice, Davidson College, and a halfway house that I helped found here for recovering alcohol and drug addicts.
INTERVIEWER: What’s the name of that?
BERNHARDT: Caldwell House. The corporate legal name is Caldwell Halfway House Inc., but after we incorporated, we decided it didn’t project too nice of an image to have “halfway” in the title, so the common usage is just Caldwell House.
By the way, it’s located in the showroom that Ham Bruce, who founded the Hamrick Furniture Company, built when they had the Market here in Lenoir. He built it so his salesmen could sleep there and not use up hotel rooms. It was also a place they could entertain customers after the showroom closed at the end of the day’s work. He’d bring them over there, about a mile from the plant. They’d come over and have fancy hot hors d’oeuvres and drinks. They’d maybe serve buffet meals to the customers. Later on, long after Ham Bruce and his family had sold to U.S. Industries, they moved the showrooms to High Point. When they did, they had no use for this facility. It sat vacant for three or four years. You couldn’t use it as a hotel. It was too big for a residence. It wasn’t very susceptible to cutting up into apartments; it could have been done, but it wouldn’t have been very viable. It’s in sort of a semi-industrial area; a textile mill used to be there.
The place was ideal for our purposes. It was typical of the halfway houses that I knew of. They’d use a big old family farmhouse where they had a lot of children and a lot of room. As time passed, the children left and the old folks died or whatnot. They’d take something like that, add a little space to it and make something to serve the purpose. We’d anticipated that that was what we’d have to go with. Then I realized that maybe we could buy this Hamrick thing. I negotiated with them for six months at least. We finally got it down to where we could manage to swing it financially.
INTERVIEWER: From the company, not from Ham Bruce’s family?
BERNHARDT: No, it was the company. It was just ideal for our purposes. It’s about the most deluxe as far as the facility itself. It’s a handsome-looking place out on a hill in the woods, secluded.
Talking about different charities, the ones I mentioned I think are the major ones. I have a few that I regularly try to contribute to annually – United Way and things like that that everybody’s involved in.
INTERVIEWER: What is your principal leisure time activity now?
BERNHARDT: About as much of some of those things as anything else. My wife and I enjoy the home life. We read and entertain, have friends over.
INTERVIEWER: She wrote a book, a mystery story, which was based on an inn in England that you had visited with her.
BERNHARDT: Yes. I first ran across the place back before my wife and I ever even met. I was very attracted and remembered it. Later after our marriage, we got to where we could take a vacation and the children got big enough. I remembered the place. We went back and it was just as nice as I remembered. It wasn’t a deluxe kind of thing; it was just a good English country inn. We started staying there, and it developed into the sort of thing we did every year. In the years that we stayed there, we just used it as a headquarters and drove like crazy all over England, trying to visit everything in Scotland and Wales.
INTERVIEWER: Where is this, in Great Britain?
BERNHARDT: It’s in Gloucestershire. It’s close to the west coast of England and is the largest town of any size. Cheltingham – that’s near this little village. It’s about 80 miles due west of London.
Bristol’s a well-known place on the Bristol Estuary. The nice thing about it was that the village was really quaint and attractive, but it wasn’t quite attractive enough to be a tourist attraction. Places like Broadway and Stratford, where Shakespeare was born, are nearby. They are just covered up with tourists. No tourist likes another tourist. We weren’t exactly tourists anyway; we got to feeling like it was sort of our own. We developed a lot of close, good friends there over the years.
INTERVIEWER: How many years have you been going there?
BERNHARDT: We went for 31 years without interruption and on occasion prior to that. I believe we went maybe once later, after an interruption. We would have kept on going more than we did except that most of our friends either died or were in rest homes. Things change. The most unchangeable thing is change.
My wife enjoyed the experiences. She didn’t particularly have any expectations of having it published when she wrote it. She wrote it mostly for her own personal satisfaction. Eventually, someone found it scattered around and contacted different publishers. Somebody took it over and published it. It’s had pretty wide sales to the people in the community and the neighboring communities and people that we’ve known personally and in other parts of the country. It’s no record-seller, best seller, nor pretends to be. But she’s enjoyed it.
INTERVIEWER: Would you have something that you might describe as your best leisure time experience?
BERNHARDT: I don’t believe I could answer that one, hardly. We try to get the best we can out of life as it now exists for us. This book that my wife had published is a major event. I can’t think of anything similar.
INTERVIEWER: Thank you for taking so much time today for this important contribution to our furniture industry. I’ve enjoyed it thoroughly.